"Impact of Novel Coronavirus... US Economy Expected to Lose 41 Trillion Won This Year"

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] As the spread of the novel coronavirus infection (Wuhan pneumonia) shows no signs of abating, there is a forecast that the U.S. economy will suffer losses exceeding 40 trillion won this year due to the outbreak.

Oxford Economics, a British economic analysis firm, stated on the 5th (local time) that the U.S. economy is expected to incur losses of $35 billion (approximately 41.4 trillion won) this year due to the novel coronavirus, which would amount to about 0.1 to 0.2 percentage points of the gross domestic product (GDP) growth rate. They predicted immediate damage to the tourism industry, manufacturing supply chain restrictions, and reduced corporate and consumer spending due to increased economic uncertainty. As a result, the forecast for the U.S. first-quarter GDP growth rate was lowered from 1.0% to 0.6%.

Earlier, considering the impact of the novel coronavirus, Oxford Economics lowered China's first-quarter economic growth forecast for this year by 2 percentage points to 4%, and also revised the annual forecast downward from 6.0% to 5.4%.

According to their economic analysis model, the institution projected that the global economic growth rate could decline by 0.25 percentage points this year due to the novel coronavirus. They added, "This is a larger drop than the 0.15 percentage point decline caused by SARS in 2003," and noted, "The novel coronavirus occurred at a vulnerable time for the global economy. Due to direct and indirect effects, the global economic growth rate in the first quarter of this year is expected to fall below 2%."

Previously, U.S. government officials repeatedly stated that the economic impact of the novel coronavirus on the U.S. would not be significant. Larry Kudlow, Chairman of the U.S. White House National Economic Council (NEC), said the day before that the novel coronavirus situation could affect the implementation of the U.S.-China Phase One trade agreement but that the damage to the U.S. economy would be limited.

Wilbur Ross, U.S. Secretary of Commerce, sparked controversy by stating on the 30th of last month that the novel coronavirus situation "could help accelerate the return of jobs to the North American region," suggesting it could be a positive factor for the U.S.

This content was produced with the assistance of AI translation services.