Coronavirus may cut US$211 bln from Asia-Pacific economies: S&P

March 06, 2020 09:14
Growth across Asia-Pacific will slow this year to the weakest level since the global financial crisis, due to the coronavirus outbreak, S&P warned. Image: Reuters

S&P Global Ratings warned on Friday that the coronavirus outbreak could knock US$211 billion off the combined economies of the Asia-Pacific, Reuters reports.

Japan, Hong Kong, Singapore and Australia are among the most exposed to the economic fallout, apart from China.

S&P cut its 2020 growth forecast for China to 4.8 percent from a previous estimate of 5.7 percent. It forecast Australian growth to slow sharply to 1.2 percent from an already below-trend 2.2 percent in 2019, the report said

Japan would take 0.5 percentage point hit and Korea a 1 percentage point knock.

"The balance of risks remains to the downside due to local transmission, including in economies with low reported cases, secondary transmissions in China as people return to work and tighter financial conditions,” S&P was quoted as saying in a report.

In other forecasts, Hong Kong’s economy would likely contract by 0.8 percent in 2020, Singapore’s would flat line, and Thailand’s expansion likely slow to 1.6 percent.

S&P did not cut growth forecasts for emerging markets of Indonesia, Malaysia, the Philippines and India, noting that reported infections in those countries are still low.

However, it warned that the outlook could quickly deteriorate if the low level of cases was due to minimal testing and if those countries are swept up in financial contagion.

“We have already had a taster of what can happen with overshooting exchange rates in response to a pick-up in world’s fear gauge,” it said.

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