Potential Economic Impact of the Coronavirus 2020
The coronavirus is serious around the globe now. We have listed out some impacts to the economy.
Welcome to China Perspective’s In Depth. We are a team of former investment bankers and hedge fund managers that curate reports and commentary on China macro & policies. Our mission is to help You to step ahead of others by understanding China. Join us to be a China Expert now!
IN 2003, THE ECONOMIC IMPACT OF SARS INCLUDED
(1) the economic growth has been significant dragged, the recovery time is relatively longer for tertiary industries.
(2) The epidemic had a greater impact on retail consumption, but the repair after the epidemic was also rapid; the impact on investment was small, and the impact on exports was not significant.
(3) The price trend of industrial products was weak, food prices and most non-food prices had little fluctuation, and medical care-related consumer prices have risen to various degrees. Comparing the incident in 2020 to 2003, the economic fundamentals are in a rising trend in the short period, but if the epidemic cannot be effectively controlled in the short-term, the economic growth will be severely affected. If the epidemic is not relieved in the short-term, a high probability of the impact will begin to appear from the first quarter. The real GDP growth rate in the first quarter of 2020 is expected to be faster than that of 2019.
THE ECONOMIC IMPACT OF CORONAVIRUS PNEUMONIA OUTBREAK IN 2020
(1) On the demand side, the epidemic will have a greater impact on retail consumption, imports will not be much affected, but the repair after the epidemic will also be rapid; the impact on investment will be small and the impact on exports will not be significant. But the prerequisite is that there should be no major outbreak in the main export areas.
(2) In terms of economic growth, in 2003, during the 2 quarter of the SARS outbreak, the real GDP growth rate from Q1 of 11.1% fell 2% to 9.1%. Due to the misalignment of the Spring Festival, under normal circumstances this year, the data in January should be weak and the data in February should be strong. However, if the workers resume work long after the holiday, the data in February may not improve significantly. The subsequent trend depends on the evolution of the epidemic. Under the normal circumstances, the real GDP growth rate in the first quarter of 2020 is expected to be flat or slightly higher than Q4 in 2019.
Thank you for reading China Perspective’s In Depth. There will be more discoveries updated daily. If you don’t want to miss them, subscribe us now!
You can also share this post with your friends and colleagues.