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Coronavirus will hurt spending in China, with spillover to global companies

Coronavirus will hurt spending in China, with spillover to global companies, says Moody’s Macroeconomics – Global update.

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On Wednesday, the World Health Organization said that China’s coronavirus has infected nearly 6,000 people domestically so far, with an additional 68 confirmed cases in 15 other countries.

The primary impact is on human health. However, the risk of contagion is affecting economic activity and financial markets. The immediate and most significant economic impact is in China (A1 stable) but will reverberate globally, given the importance of China in global growth as well as in global company revenue.

By sector, the coronavirus will likely have the largest negative impact on goods and services sectors within and outside of China that rely on Chinese consumers and intermediary products.

China’s annual GDP growth forecast unchanged so far, but composition could shift

In our baseline, we expect the outbreak to have a temporary impact on China’s economy and for annual GDP growth in China to remain in line with our forecast of 5.8% in 2020.

However, the composition of growth will likely shift because of a dampening of consumption in the first quarter, potentially offset by stimulus measures.

Nonetheless, there is still a high level of uncertainty around the length and intensity of the outbreak, and we will review our forecasts as conditions evolve.

Excerpt from “Moody’s Sector Comment“, 30 January 2020 issue.

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Thai economy continued on a decelerating trend in January

In January 2020, the Thai economy continued to be on a decelerating trend According to a Press Release by the Bank of Thailand

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According to the Press Release on the Economic and Monetary Conditions for January 2020 (Bank of Thailand), the Thai economy continued on a path of deceleration in January, contracting from the previous month in the value of merchandise exports excluding gold, manufacturing production, private investment indicators, and public spending.

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Economics

NESDB projects 1.5-2.5 percent growth in 2020

With help from the government’s economic measures, the National Economic and Social Development Board (NESDB) is expecting the Thai economy this year to grow just 1.5-2.5 percent.

National News Bureau of Thailand

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Construction Workers in Bangkok

This year, the country’s economy is facing another big concern from the COVID-19 virus situation. With help from the government’s economic measures, the National Economic and Social Development Board (NESDB) is expecting the Thai economy this year to grow just 1.5-2.5 percent.

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Economics

COVID-19 Set to Dampen Asean and China’s Economic Growth

The SARS outbreak provides a useful benchmark, but there are significant differences between that epidemic and the latest one.

Boris Sullivan

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Coronavirus Asia

The ongoing coronavirus outbreak will dampen economic growth in China this year, but the scale of the impact remains uncertain and will depend on the duration and intensity of the health crisis, says Fitch Ratings.

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