IMF Chief Sees ‘Mild’ Virus Impact on Global Economy

Telling the economic cost from the virus outbreak in China is too early, but the risk to global growth should be "mild," said Kristalina Georgieva, head of the International Monetary Fund, Wednesday.

The death toll from China's new coronavirus epidemic has risen above 1,350 but expectations have increased that the outbreak could peak later this month.

The IMF is expecting a “V-shaped impact,” with a sharp decline in activity in China followed by a sharp recovery, meaning there likely will only be a “mild impact on the rest of the world,” Georgieva said on CNBC.

But she cautioned: “It is still too early to make projections,” and the global economy is “somewhat less strong” than it was when China faced the SARS virus epidemic in 2003.

“China was different, the world was different. This virus is clearly more impactful and the world economy then was very strong,” she said.

The IMF projects China’s economy will grow 6.0 percent this year, compared to 10 percent in 2003.

Similarly, US officials are reluctant to provide forecasts but say the impact on the American economy is likely to be short-lived.

"Without doubt, it has a significant impact in China," Treasury Secretary Steven Mnuchin told lawmakers on Wednesday. Yet "I don't anticipate the coronavirus to have any effects beyond this year" for the US economy.

He repeated Federal Reserve Chairman Jerome Powell's words, adding, "We're watching really closely, clearly."

Source: AFP