The coronavirus crisis could wipe out $211 billion across Asia Pacific, S&P Global says

The coronavirus crisis could wipe out $211 billion from economies across Asia Pacific, according to a Friday report from S&P Global Ratings. Australia, Hong Kong, Singapore, Japan, South Korea and Thailand “will enter or flirt with recession,” the ratings giant said. S&P Global also trimmed its growth forecast for China from 5.7% for 2020, to 4.8%.

The coronavirus outbreak, which first started in China, is now spreading globally. There are now at least 95,270 confirmed cases and 3,280 deaths worldwide, according to the latest numbers from the World Health Organization. Outside China, the countries most affected by the outbreak are South Korea, Italy and Iran, which have the highest numbers of cases.

The hardest-hit economies will be Hong Kong, Singapore, Thailand and Vietnam, where tourism accounts for a large part of GDP — almost 10% on average, the report said. Tourists from China account for a large share of visitors in those countries, S&P Global added. These economies are also highly exposed to any supply chain risks in the electronics and autos industries, the report said.

In China, factories are gradually restoring production, but supply chains have been significantly disrupted as many companies have key manufacturing facilities there. Meanwhile, demand in many countries has been hit as consumers cut back on going out to shops and restaurants. The tourism and travel sectors have been severely affected as consumers cancel holidays, and companies postpone all non-essential trips. That has sent airline stocks plummeting.

Globally, airlines could lose up to $113 billion in revenue this year, the most since the financial crisis, if the disease continues to spread, the International Air Transport Association forecast on Thursday. However, economies could bounce back by the end of 2021 if signs emerge by the second quarter this year that the virus is contained worldwide, S&P Global said.

The coronavirus crisis could wipe out $211 billion across Asia Pacific, S&P Global says, CNBC, Mar 6