ANZ lowers G3 growth forecast, sees Japan contracting in 2020

March 5, 2020

SINGAPORE - In its latest Global Macro Insight, ANZ Bank has downgraded notably its growth forecasts for G3, saying that COVID-19 is presenting itself as a substantive supply and demand shock to the global economy.

"As a baseline, we need to assume repeated localised pockets of infection breaking out across the world causing substantive disruptions to everyday life and thus activity," it says. 

ANZ believes Japan is set to contract in 2020. In the US and the euro area, it expects a sharp slowing over the next six months. "The inflation outlook has also been lowered."

ANZ says: "Policymakers are doing what they can to support growth, and will use all the tools they have available. We expect further rate cuts from the Fed, and for the ECB and the BoE to join the easing.

"Fiscal policy will be crucial given that monetary policy is so close to the effective lower bound." (ATI).