Tue, Jan 28, 2020 page6

• Singapore says virus will hit its economy

  • Reuters, SINGAPORE
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  Singapore said yesterday that the coronavirus outbreak will hurt its economy this year, as it announced new measures to tackle the disease, which originated in China and has spread to the city-state and several other countries.

  The Southeast Asian travel and tourism hub, which recorded its lowest growth rate in a decade last year at 0.7 percent, has reported four cases of the coronavirus that has killed 80 people in China so far.

  “We certainly expect there to be an impact on our economy, business and consumer confidence this year especially as the situation is expected to persist for some time,” Singaporean Minister for Trade and Industry Chan Chun Sing (陳振聲) said.

  

  A woman wearing a mask walks past a man with Singapore flags adorning his motorcycle at the Marina Bay waterfront in Singapore on Sunday. Singapore has reported four cases of the novel coronavirus as China expanded drastic travel restrictions to contain viral contagion.

  Photo: AFP

  The government is considering support measures for hard-hit sectors like tourism which could include property tax, rebates and worker levy cuts, he added.

  Chinese nationals make up the largest share of visitors to Singapore, one of the worst-hit countries outside of China in the 2003 outbreak of SARS, which killed 800 people globally.

  Singapore is currently forecasting growth in a wide range of 0.5 to 2.5 percent this year.

  Chan is part of a government task force set up to tackle the coronavirus in Singapore.

  The task force also announced a raft of new measures yesterday to halt the spread of the virus, including urging all school students and staff with a recent travel history to China to stay at home for a fortnight. Families in Singapore, many of which are ethnically Chinese and have relatives in mainland China, are currently traveling for Lunar New Year holidays.

  It also issued a new advisory for travelers to defer all non-essential travel to mainland China and said it will start temperature screening all inbound flights to Singapore.

  Residents of China’s Hubei Province, where the disease originated, were banned from entering Hong Kong amid global efforts to halt the rapid spread of the outbreak.

  The virus has so far spread to more than 10 countries and the viral outbreak may end up hitting Japan’s fragile economy harder than the SARS outbreak of 2003, according to economists.

  Tourism has become a much more important prop to Japan’s growth over the past decade, and Chinese tourists are the biggest spenders. That is why China’s decision on Saturday to start blocking outbound tour groups to try to stem the spread of the novel coronavirus has some Japanese economists concerned.

  If the much higher visitor numbers now tumble at the same pace as they did during the SARS outbreak of around three months, Japanese growth could be cut by 0.2 percentage point, Mitsubishi UFJ Morgan Stanley economist Shuji Tonouchi said.

  Should the crisis drag on for a full year, it could shave 0.45 percentage point from Japan’s expansion, Nomura Research Institute economist Takahide Kiuchi estimates.

  The timing of the outbreak is bad for Japan, where GDP is forecast to have shrunk 3.7 percent in the fourth quarter amid an export slump and a consumer-spending drought following October’s sales tax hike. Economists are expecting government spending to fuel a 1 percent rebound this quarter, but the coronavirus crisis adds a new downward factor.

  “Given the Lunar New Year timing and the increase in Chinese overseas visitors with the rise of China’s presence, I expect the economic impact to be bigger,” Shoji Hirakawa, a strategist at Tokai Tokyo Research Institute, wrote in a note to clients.

  Additional reporting by Bloomberg
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