S&P Global estimated that China’s coronavirus outbreak could drag Eurozone and UK growth by -0.1% to -0.2% this year. The impact will likely be felt mostly in Q1 though. It noted, “a large share of economic activity hindered by the outbreak of the virus, especially goods production, would just be postponed rather than canceled altogether.” However, “if a catch-up effect materializes, the economic outlook for 2021 could even be slightly higher than our current baseline forecast of 1.2%.”
The agency’s US chief economist also warned that “most of the drag on U.S. growth to be in the first quarter, with a smaller hit in the second quarter and a rebound in the latter half.” And, “along with the potentially devastating human toll, if the virus spreads further and lasts longer, the impact on virtually every economy could be far worse,.” US GDP growth in Q1 could be dragged to just 1% annualized, from previous forecasts of 2.2%.
