THE coronavirus could wipe more than $200 billion off Asia Pacific economies this year, S&P Global ratings warned Friday, sending growth to its lowest level in more than a decade, as governments struggle to combat the disease.
In a worst-case scenario, China could see growth of less than three percent, while Japan, Australia and Hong Kong could “flirt with recession,” it said in a report.
Fears about the impact of the outbreak, which has spread to at least 85 countries since it began in China in late December, have hammered world markets as investors fret over its economic impact.
S&P said it expected the region to grow 4.0 percent this year as supply and demand shocks blow a $211 billion hole in the economy. That compares with a 4.8 percent estimate given in December and would be the worst performance since a contraction in 2008 caused by the global financial crisis.
“Asia-Pacific’s outlook has darkened due to the global spread of the coronavirus,” it said. “This will exert domestic supply-and-demand shocks in Japan and Korea. It will mean weaker external demand from the US and Europe.”
The report said economies were suffering from the double-whammy of weak demand as consumers stay home for fear of catching the disease, and falling supplies as industries are rocked by shutdowns.
It saw China’s economy – which was already stuttering before the crisis struck – expanding 4.8 percent this year, which would be the worst in three decades.
However, it added that in the worst case, which “assumes localized reinfections as people return to work and the re-imposition of some restrictions on activity” growth could crash to just 2.9 percent. (AFP)
