Virus blow to China’s economy to be worse than SARS, Nomura says

January 31, 2020 Siyabonga Mtangana

CORRECTS MR. KATO’S COMPANY TO INTEC – Wearing surgical masks, Takeo Aoyama, center left, an employee at Nippon Steel Corp.’s subsidiary in Wuhan, China, and Takayuki Kato, center right, an employee at an information and communications technology company Intec, speak to journalists after returning home by a Japanese chartered plane at Haneda international airport in Tokyo Wednesday, Jan. 29, 2020. Japan on Wednesday began evacuating their citizens from the Chinese city hardest-hit by an outbreak of a new virus. Aoyama said more than 400 Japanese people wishing to return to Japan are in Wuhan. (AP Photo/Haruka Nuga)

INTERNATIONAL – As the economic dislocation caused by the coronavirus and China’s efforts to stem its spread becomes clearer, Nomura International Ltd. now expects the blow to growth could exceed that seen during the SARS outbreak of 2003.

Real GDP growth in the first quarter could “materially drop” from the 6% pace in the fourth quarter, maybe by even more than the 2 percentage point deceleration seen in the second quarter of 2003 from the first, Nomura economists led by Lu Ting wrote in a report to clients.

Nomura expects policy makers will provide liquidity and credit support, especially to business owners severely hit by the pandemic.

Source: iol.co.za

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