Governments should consider extreme measures to keep their economies pumping during the coronavirus outbreak - including extra pay and tax relief for health workers, temporary VAT cuts to keep people spending, and reduced employers' taxes to prevent lay-offs.
The Organisation for Economic Co-operation and Development (OECD) warned yesterday that the outbreak has plunged the world economy into its worst downturn since the financial crisis.
Ryanair boss Michael O'Leary said it was a "time for calm" yesterday as his airline slashed services to Italy.
The airline is cancelling up to 25pc of its flights to Italy - one of its most important markets - between St Patrick's Day and April 8 due to the coronavirus outbreak, despite bookings.
The airline said there had been a "significant" increase in the number of no-shows for flights but insisted it did not expect the cancellations to have a material effect on its current financial year, which ends this month.
"It is far too early to speculate what impact the Covid-19 outbreak will have on full-year 2021 earnings," it said. Its shares plunged 6pc yesterday to a four-month low.
"Our focus at this time is on minimising any risk to our people and our passengers," said Mr O'Leary. "While we are heavily booked over the next two weeks, there has been a notable drop in forward bookings towards the end of March and into early April."
Easter falls on April 12 and the holiday is typically one of Ryanair's busiest periods.
Meanwhile, the OECD said growth in the world economy will be half what had been expected this year, at just 2.4pc, and the worst growth since 2009.
If the outbreak worsens, global growth could drop to as low as 1.5pc this year, the OECD warned.
The body, which advises rich countries on policy, said governments and central banks should stimulate demand to avoid an even steeper slump and even a recession.
OECD chief economist Laurence Boone told Reuters that governments needed to support health systems with extra pay or tax relief for workers doing overtime, and short-term working schemes for companies struggling with a slump in demand.
Governments could give companies further financial relief by cutting social charges, suspending value-added taxes and providing emergency loans for sectors hit particularly hard, such as travel, Ms Boone said.
"We don't want to add a financial crisis to the health crisis," she added.
Global factory data for February shows the outbreak has already had a dramatic effect, with US and UK manufacturing slower last month, and China suffering its sharpest slowdown ever.