With the increase of coronavirus cases worldwide, there are deep concerns over its impact on the economy. “The ASEAN+3 Macroeconomic Research Office (AMRO) states that the pandemic can deduct half a percentage point from the financial growth of regional economies.”
Apart from China, the effect can be felt in the remaining ASEAN+3 economic bloc, including 10 members of the Association if Southeast Asian Nations and South Korea, Japan, as well as China.
Direct Impact on Travel and Tourism and Others
Flight suspensions, restrictions and bans on the visitors from China, and stopping outbound travel groups have led to disruption to the travel and tourism.
A drop in number of visitors from China and other countries is thus damaging the ASEAN+3 region, particularly to countries having large tourism sectors.
Besides, trade within the ASEAN+3 region is also in disruption as the manufacturing sector is taking a toll. Regional economies such as Vietnam such as Singapore are integrated within the regional and global supply chains and in here China serves as an important link, so any sort of disruption will have a heavy impact in regional trade and production.
As many countries in this region have tremendously growing number of confirmed COVID-19 cases, the spread will have a direct impact on these economies through effect on the healthcare sector and indirectly through measures that are implemented for containment of the virus, like quarantine.
Also, it impacts the business and its consumers’ confidence while automatically changing public behaviour. And this will lead to disruption to domestic production and lesser spending on goods and services.
If by any chance the Chinese economy slows down more or the pandemic lasts longer, then the recent estimates suggest that the effect on the regional economies will be much more severe.
Having said that, the ASEAN+3 economies does have policy to mitigate the impact and bolster the economic growth. If you may know already China is already implementing various measures like providing financial aid to the most effected sectors, to support its economy.
Given the present situation it is believed that skillful use of policy levers by the policymakers is critical to the global economic slowdown.
