Asia is sick, economic recession is possible amid the Covid-19 outbreak

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Pic captured from Aljazeera Video
Singapore’s Ministry of Trade and Industry (MTI) yesterday warned of a possible full-year recession due to the impact of coronavirus or the so-called the Covid-19 outbreak on the economy in the region and whole Asia.“The outlook for the Singapore economy has weakened since the last review in November,” said MTI.On Friday, Prime Minister Lee Hsien Loong said that the economic impact of the Covid-19 outbreak was already bigger than in 2003 when Singapore was hit with an outbreak of severe acute respiratory syndrome (Sars), the Malay Mail reported.MTI also warned that if the Covid-19 outbreak is more widespread, there could be a sharper decline in global consumption.

In a press release today, the MTI said that Singapore GDP growth could be downgraded by – 0.5 per cent to 1.5 per cent this year.

The economy would be affected by supply chain disruptions arising from prolonged factory closures and labour shortages in China.

The outbreak has also affected the tourism sectors. There is a sharp fall in tourist arrivals, particularly from China.

According to CNBC news, Japan’s economy has shrunken to its worse due to the growing coronavirus risks.

Analysts said the epidemic which is damaging business and tourism could undermine growth in the current quarter and push Japan into recession.

“There’s a pretty good chance the economy will suffer another contraction in January-March. The virus will mainly hit inbound tourism and exports, but could also weigh on domestic consumption quite a lot,” Taro Saito, an executive research fellow at NLI Research Institute was quoted by CNBC as saying.

“If this epidemic is not contained by the time of the Tokyo Olympic Games, the damage to the economy will be huge,” he said.

Worries about the spread of the coronavirus and its hit to the global economy kept Japanese manufacturers’ mood gloomy in February, a Reuters poll found.

Investors are now watching to see if growth will rebound in the current quarter as the Bank of Japan projects, amid fresh risks from the coronavirus that have forced factories in China to shut down and led to a sharp drop in Chinese tourists.

 

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Graduate with a Master of Mass Communication. 10 years working experience in the media and broadcasting.

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