Coronavirus – impact on Asia
The spread of coronavirus – 2019-nCov – poses tangible macro risks to Asian economies outside China
Assuming the virus remains broadly in China, we examine the four channels through which we believe the effect will spread – tourism, trade, domestic consumption and financial markets
Small/open economies, such as Hong Kong, Taiwan, Korea, Singapore and Thailand are vulnerable to negative spillovers from China, while domestic-oriented economies – such as India and Indonesia – are more insulated
The outbreak casts clouds over the anticipated trade recovery and adds additional risks to an already lacklustre economy. We expect policy responses from Asian authorities as the crisis deepens
Broader risks would be associated with a more significant outbreak of the virus. Then, economies with high density populations, low health security index and high domestic demand components etc. could be severely affected. Hong Kong, Singapore and Taiwan would appear most vulnerable.
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