IMF chief sees 'mild' virus impact on global economy

IMF chief sees 'mild' virus impact on global economy

People wearing face masks Wuhan COVID virus
People in Hong Kong wearing facemasks as a preventative measure following a coronavirus outbreak which began in the Chinese city of Wuhan. (Photo: AFP/Anthony Wallace) 

WASHINGTON: It is too early to tell the economic toll from the virus outbreak in China, but the hit to global growth should be "mild", International Monetary Fund chief Kristalina Georgieva said Wednesday (Feb 12). 

The death toll from the new coronavirus epidemic in China has climbed past 1,350, but hopes have risen that the outbreak could peak later this month.

READ: Hubei reports nearly 15,000 new COVID-19 cases after broadening definition for infections

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 per cent this year, compared to 10 per cent in 2003.

US officials likewise are reluctant to provide forecasts but say the impact on the American economy probably will be short-lived.

"There's no question it's having a significant impact in China," Treasury Secretary Steven Mnuchin told legislators Wednesday. 

"I don't expect that the coronavirus will have an impact beyond this year," he added. 

He echoed the comments from Federal Reserve Chairman Jerome Powell, saying, "we're obviously monitoring very carefully."

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