• March 09, 2020
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APAC could lose $211 billion in growth amid COVID-19 outbreak

The combined economies of Asia Pacific stand to lose $211 billion in growth in light of the novel coronavirus outbreak, according to a report from market intelligence firm S&P Global. The same report has noted that COVID-19 could slow down GDP growth across the region from 4.8% to 4.0%, which would be the region’s worst performance since the global financial crisis of 2008.

"Asia-Pacific's outlook has darkened due to the global spread of the coronavirus. This will exert domestic supply-and-demand shocks in Japan and Korea. It will mean weaker external demand from the US and Europe”, said the S&P report.

Being the epicentre of the outbreak, China is expected to take a significant hit, with growth falling to 4.8% in 2020 from an optimistic 5.7%, the lowest in three decades. In a downside scenario, China’s growth will slow to a crawl of 2.8%. A separate report from the Asian Development Bank (ADB) projects a $103 billion loss for China, which translates to 0.8 percentage point in GDP.

Outside of China, growth will fall well below trend in Australia, Hong Kong, Japan, Singapore, South Korea and Thailand, causing these areas to “enter or flirt with recession.” In developing economies, ADB expects losses to hit $22 billion.

Hong Kong, Singapore, Thailand, and Vietnam will be the hardest hit, owing to these economies’ reliance on tourism. On top of this, S&P has also said that these areas have high exposure to supply chain risks in the automobile and electronics industries.

Recovery may happen by the tail end of 2021 if the virus is contained by the first half of 2020, noted the S&P report.