IN CHARTS: keeping up with COVID-19

The good news…

Measures taken by the Chinese authorities appear to have been successful in containing the spread of coronavirus (COVID-19).

"This marks a new phase of the outbreak, just as the situation looks to be getting under control in China.”

Within Hubei Province, daily new cases have fallen to a few hundred, from 2-3,000 in early February. In the rest of Mainland China, new cases are in the single digits. The number of reported deaths has also dropped.

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The bad news…

The outbreak in the rest of the world has started to pick up exponentially, especially in South Korea, Italy and Iran. There are also more countries reporting the presence of infections. This marks a new phase of the outbreak, just as the situation looks to be getting under control in China.

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The uncertain…

The economic impact from the outbreak in the Asian region will be felt through four main channels:

1. Directly in tourism from a sharp drop-off in Chinese tourists;
2. Directly in trade from a drop in Chinese goods imports due to weak China activity;
3. Indirectly from reduced confidence which leads to lower spending, and spill over effects from weaker growth in neighbouring countries and supply chain disruptions; and
4. Increasingly directly, for economies which have seen a significant increase in COVID-19 cases, lower activity due to containment measures, and restrictions imposed to other countries.

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There is a need for strong policymaker response. While monetary policy easing will help, it is fiscal policy – direct stimulus rather than through the cost of credit channel - that will need to do more of the heavy lifting in helping to support businesses and households through the challenging period ahead.

For example, Singapore has led the way with a very expansionary Budget 2020. Other governments will need to do what they can.

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Khoon Goh is Head of Asia Research at ANZ

To hear more of Goh’s thoughts on COVID-19, watch this video from the AustCham ANZ Economic Outlook