Even though many policymakers have spoken out about the outbreak, The International Monetary Fund is being more cautious about the matter, and has explained that it is too early to tell the effects it will have on the economy.
I think that the slow down of the U.S. economy, along with the global economy, will all depend on how quickly the outbreak is contained.
People are also comparing this outbreak to the 2002-2003 SARS (Severe Acute Respiratory Syndrome) which ended up leading to around 800 deaths.
Many people are saying that the global economy will be hit harder this time around seeing as China accounts for a larger share of the world economy? Would you agree with this statement? Why or why not?
4 comments:
I think it still too early to tell how this outbreak may affect the global economy. It is definitely a scary thought to even consider how impactful it may be if there is a large downturn of the Chinese economy due to this virus. On the other hand, I do not think the economy will be hit as hard as we would expect...at least not the global economy and the U.S. economy.
Like mentioned earlier, it is definitely still too early to say what may or may not come of this horrible virus and what impact it may have on everyone else in the world.
I would say possibly to the question that you pose at the end. I think that it could go one of two ways. A much worse downturn because China is much more connected to the Global economy than they were before, but could also be just fine because of their increase in size. Hopefully the latter will be the case but the effects will be interesting to follow.
It is reasonable to assume that the virus will weaken consumer confidence and reduce domestic economic investment in China, so with the slowing of the Chinese economy it is likely that global economic growth will decline and/or stagnate. Because of the immense size of the Chinese economy though, it is possible that the virus will have minuscule effects on the China’s economy and its economic growth.
Since the U.S. has already seen a decrease in GDP due to the effects of the coronavirus, such as decreases in tourism and the temporary shut down of U.S. factories in China, it is possible that other countries will experience set backs as well that will impact the global economy as a whole. However, I agree with the argument that it is still too early to predict what the full impact of the virus will be.
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