Coronavirus outbreak in China: Risks of supply chain disruption increase with time

Euler Hermes’ economists have been analyzing the impact of the coronavirus outbreak on the global economy.

  • The official PMIs for January released today do not yet reflect the magnitude of the economic concerns around the ongoing coronavirus 2019-nCoV outbreak in China. However, we think that its impact on the Chinese economy and the rest of the world is not negligible.
  • The hit to China’s GDP y/y growth could amount to c. 1pp, mostly over Q1 2020. A recovery should thereafter be possible, based on pent-up production and policy support.
  • A protracted pause in Chinese activity could be disruptive for certain supply chains such as chemicals, transport equipment, textile and electronics.
  • The top five economies potentially hit by this disruption are Taiwan, South Korea, the Netherlands, Hungary and Indonesia.

Read the full report of Euler Hermes’ economists here.

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