The Organisation for Economic Cooperation and Development on Monday urged governments to act immediately to address the economic impact of the coronavirus outbreak, predicting the disease could slash growth in half this year.

In its latest interim economic assessment, the OECD said growth would slow to 2.4% in 2020, compared to its November forecast for 2.9%, under a best-case scenario of limited coronavirus outbreaks outside China.

But if the contagion spreads across the wider Asia-Pacific region and advanced economies, growth could be as low as 1.5%.

Under both scenarios, “Governments need to act swiftly and forcefully to overcome the coronavirus and its economic impact,” the OECD said, calling, among other things, for “monetary policies to remain supportive in all economies to ensure that long-term interest rates remain low.”

“The virus risks giving a further blow to a global economy that was already weakened by trade and political tensions,” OECD Chief Economist Laurence Boone said in a news release.

As The Financial Times reports, the OECD’s warning “came as heavy hints of central bank support for the global economy jolted stock markets higher on Monday following a dire week in which global equities lost one-tenth of their value.”

The Bank of Japan said it would “provide ample liquidity and ensure stability in financial markets” while the Bank of England said it was working with international partners “to ensure all necessary steps are taken to protect financial and monetary stability.”

The U.S. Federal Reserve said on Friday that it would “act as appropriate” to support growth.

“Conditional on the current growth projections, there is limited need for further reductions in policy interest rates in the United States unless the risks of a sharper growth slowdown rise,” the OECD said.

The Paris-based organization also said that “If downside risks materialize, and growth appears set to be much weaker for an extended period, coordinated multilateral actions to ensure effective health policies, containment and mitigation measures, support low-income economies, and jointly raise fiscal spending would be the most effective means of restoring confidence and supporting incomes.”

(Photo by ANTHONY WALLACE/AFP via Getty Images)

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