Spain's Economic showed moderate growth at end of 2019 - Canada News Media
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Spain’s Economic showed moderate growth at end of 2019



MADRID (Reuters) – Indicators suggest the Spanish economy stabilized toward the end of 2019 after experiencing a summer slowdown, possibly linked to the uncertainty of Brexit, Spain’s Economy Minister Nadia Calvino said on Monday.

“In the fourth quarter of the year, in autumn and winter, there was some stabilization, including, perhaps moderate growth, or acceleration of growth,” Calvino told state broadcaster RTVE.

“Everything points to a growth of around 2% (in 2019),” she added.

(Reporting by Inti Landauro, writing by Ashifa Kassam)

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By the numbers: Economic effects of China coronavirus –



Suspended flights, cancelled tours, temporary restaurant closures, and millions of people in lockdown amid an extended nationwide holiday are just some of the results of a contagious new coronavirus that has caused more than 80 deaths in China.

At the epicentre of the outbreak is Wuhan, a Chinese city of more than 11 million people, where the disease was first recorded and is now home to the highest number of cases.

Touted as China’s Chicago, fast-growing Wuhan was expected to record a regional economic growth rate of up to 7.8 percent in 2020, according to local government estimates. This would make it a key pillar of growth in China’s sluggish economy, which is expected to grow by just 6 percent, according to central government figures.

However, as shutters roll down in shops and public transportation comes to a standstill as the coronavirus spreads, one of China’s brightest economic spots could end up dimming the prospects of a country already struggling with its weakest economic growth in 29 years.

China said on Monday that its finance ministry and National Health Commission have extended 60.33 billion yuan ($8.74bn) to help contain the virus.

International airlines ranging from Taiwan’s China Airlines to Singapore’s Scoot have cancelled flights to and from Wuhan. According to data from aviation data analytics firm Cirium, Wuhan receives 55 international flights each week from more than 20 countries.

In response to questions from Al Jazeera, AirAsia and Cathay Pacific referred to official statements regarding the suspensions of flights from Wuhan.

As of Sunday, Cathay Pacific extended the suspension of its flights to and from Wuhan until the end of March and allowed crew members and front-line airport employees to wear face surgical masks.

Meanwhile, AirAsia has temporarily cancelled all flights from Kota Kinabalu in Malaysia, Bangkok and Phuket to Wuhan until January 28, resulting in some three flights suspended daily, based on their weekly frequency schedule.

Passengers have been offered full refunds, and the opportunity to book a new travel date within 30 days, or credit an AirAsia account to be used within 90 days, the airline said.

Neither airline responded directly to questions about the costs they might incur from the suspensions of their daily flights to Wuhan.

As consumption spending has become the most important growth driver for the Chinese economy in recent years, a key near-term risk is a negative effect the virus has on Chinese consumer sentiment, according to Rajiv Biswas, chief economist for Asia Pacific at IHS Markit.

“With many entertainment venues in China, including an estimated 11,000 cinema theatres as well as major resorts such as the Disneyland park in Shanghai having temporarily closed due to the Wuhan virus outbreak, the immediate negative impact on China’s entertainment industry is already significant,” he said in a note shared with Al Jazeera.

Other Asia-Pacific countries are also vulnerable to a further economic slowdown in China, as well as a decline in Chinese tourism as the country imposes travel bans on outgoing group tours, Biswas said.

“The rapid rise in household incomes in China has triggered a boom in Chinese tourism visits abroad, which have risen from 20 million in 2003 to 150 million in 2018. Consequently, the vulnerability of many Asia-Pacific economies to a slowdown in Chinese tourism visits has increased significantly over the past two decades,” he said.

How bad can it get?

On Monday, shares of tour operators fell in Thailand and Japan as China banned outbound group tours to contain the spread of the virus.

Singapore is also bracing for economic fallout from the virus.

“We certainly expect there to be an impact on our economy, business and consumer confidence this year, especially as the situation is expected to persist for some time,” Singapore’s Trade Minister Chan Chun Sing said on Monday.

At a news conference, Chan said Singapore’s government is considering support measures for hard-hit sectors such as tourism.

Chinese nationals make up the largest share of visitors to Singapore, one of the worst-hit countries outside of China in the 2003 outbreak of Severe Acute Respiratory Syndrome (SARS), another strain of the coronavirus which killed 800 people globally.

A 2018 study estimated that another global influenza pandemic could kill 720,000 people and cost $500bn, or 0.6 percent of global income per year.

That is within the range of estimated global losses from global warming (between 0.2 percent and 2 percent of global income).

Lower and middle-income countries would suffer the most, with an estimated 1.6 percent of annual income lost if an influenza pandemic occurred.

High-income countries are expected to lose about 0.3 percent of the annual income.

China-wide, if spending on things including discretionary transport and entertainment dropped by 10 percent, overall gross domestic product (GDP) growth would fall by about 1.2 percentage points, according to “back of the envelope” estimates from Shaun Roache, chief economist for the Asia Pacific region at global ratings agency Standard & Poor’s.

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Japan warns about risks to economy from China virus outbreak –



Japan‘s economy minister has warned that corporate profits and factory production might take a hit from the coronavirus outbreak in China that has rattled global markets and chilled confidence.

Asian stocks extended a global selloff as the outbreak in China, which has killed 106 people and spread to many countries, fuelled concern over the damage to the world’s second-largest economy – an engine of global growth.


“There are concerns over the impact to the global economy from the spread of infection in China, transportation disruptions, cancellation of group tours from China and an extension in the Lunar Holiday,” Yasutoshi Nishimura told a news conference after a regular cabinet meeting on Tuesday.

“If the situation takes longer to subside, we’re concerned it could hurt Japanese exports, output and corporate profits via the impact on Chinese consumption and production,” he said.

China is Japan’s second-largest export destination and a huge market for its retailers. Chinese visitors made up 30 percent of all tourists visiting Japan last year, and their spending made up 40 percent of the total receipts from foreign tourists last year, an industry survey showed.

The outbreak could hit Japanese department stores, retailers and hotels, which count on a boost to sales from a jump in the numbers of Chinese tourists during the Lunar New Year holiday.

Carmaker Honda Motor, which has three plants in Wuhan, the capital of Hubei province and the epicentre of the outbreak, plans to evacuate some staff. Aeon will close its shopping malls in the city until Thursday.

Economists at SMBC Nikko Securities estimate that if a ban that China has imposed on overseas group tours lasts another six months, it could hurt Japan’s economic growth rate by 0.05 percent.

Some expect the potential damage could be much worse.

Hideo Kumano, the chief economist at Dai-ichi Life Research Institute, said the decline in tourists from China could hurt Japan’s gross domestic growth rate by up to 0.2 percent.

“The biggest worry is the risk the negative impact from the outbreak persists and hits [the economy] during the Tokyo Olympic Games,” when a huge number of Chinese tourists are expected to visit Japan, he said.

“If the number of visitors decrease rather than increase, the hit to Japan’s consumer industry will be quite large.”

Japan will host the 2020 Olympics in July and August.

Reuters news agency

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Three reasons coronavirus won’t derail China’s economy – MarketWatch



Project Syndicate

By Shang-Jin Wei

Published: Jan 27, 2020 4:57 pm ET

Investors are overreacting to the Wuhan epidemic

Pedestrians wearing face masks cross a road in Hong Kong on Monday.

NEW YORK (Project Syndicate) — The panic generated by the new coronavirus, 2019-nCov, which originated in Wuhan, one of China’s largest cities and a major domestic transport hub, reminds many of the fear and uncertainty at the peak of the 2003 SARS crisis.

China’s stock market



 , after rising for months, has reversed itself in recent days, and global markets have followed suit,



 apparently reflecting concerns about the epidemic’s impact on the Chinese economy and global growth. Are these worries justified?

Opinion: The main reason for the stock market’s decline is NOT the coronavirus

My baseline projection is that the coronavirus outbreak will get worse before it gets better, with infections and deaths possibly peaking in the second or third week of February. But I expect that both the Chinese authorities and the World Health Organization will declare the epidemic to be under control by early April.

Small impact

Under this baseline scenario, my best estimate is that the virus will have only a limited negative economic impact. Its effect on the Chinese growth rate in 2020 is likely to be small, perhaps a decline on the order of 0.1 percentage point of gross domestic product.

The effect in the first quarter of 2020 will be big, perhaps lowering growth by one percentage point on an annualized basis, but this will be substantially offset by above-trend growth during the rest of the year. The impact on world GDP growth will be even smaller.

Such a prediction recalls the experience of the 2003 SARS crisis: a big decline in China’s GDP growth in the second quarter of that year was then largely offset by higher growth in the subsequent two quarters. While the full-year growth rate in 2003 was about 10%, many investment banks’ economists over-predicted the epidemic’s negative impact on growth.

Looking at annual real GDP growth rates from 2000 to 2006, it is very hard to see a SARS effect in the data.

Some fear that the epidemic’s timing — at the start of the week-long Chinese New Year celebration, and in the middle of traditional school-break travels — will exacerbate the economic fallout by keeping many people away from shops, restaurants, and travel hubs.

Three factors

But three important factors may limit the virus’s impact.

First, in contrast to the SARS outbreak, China is now in the internet commerce age, with consumers increasingly doing their shopping online. Much of the reduction in offline sales owing to the virus will likely be offset by an increase in online purchases.

And most of the vacations canceled today will probably be replaced by future trips, because better-off households have already set aside a holiday travel budget.

Many factories have scheduled production stoppages during the Chinese New Year holidays anyway, so the timing of the epidemic may minimize the need for further shutdowns. Similarly, many government offices and schools had planned holiday closures independently of the virus outbreak.

The government has just announced an extension of the holiday period, but many companies will find ways to make up the lost time later in the year. The short-term negative impact is thus likely to be concentrated among restaurants, hotels, and airlines.

Second, all reports indicate that the Wuhan coronavirus is less deadly than SARS (although it may have a faster rate of transmission initially). Equally important, the Chinese authorities have been much swifter than they were during the SARS episode in moving from controlling information to controlling the spread of the virus.

By implementing aggressive measures to isolate actual and potential patients from the rest of the population, the authorities have improved their chances of containing the epidemic much sooner. That, in turn, increases the likelihood that the lost economic output this quarter will be offset by increased activity in the remainder of the year.

Third, whether or not China’s trade negotiators realized the severity of the Wuhan virus when they signed the “phase one” trade deal with the United States on Jan. 15, the timing of the agreement has turned out to be fortunate.

By greatly increasing its imports of facemasks and medical supplies from the U.S. (and elsewhere), China can simultaneously tackle the health crisis and fulfill its promise under the deal to import more goods.

Global growth

The virus’s impact on other economies will be even more limited.

During the last half-decade, many major central banks have developed models to gauge the impact of a slowdown in China on their economies. These models were not built with the current health crisis in mind, but they do take into account trade and financial linkages between China and their respective economies.

As a rule of thumb, the negative impact of a decrease in China’s GDP growth on the U.S. and European economies is about one-fifth as large in percentage terms.

For example, if the current coronavirus epidemic lowers China’s growth rate by 0.1 percentage point, then growth in the U.S. and Europe is likely to slow by about 0.02 percentage point. The impact on Australia’s economy may be twice as large, given its stronger commodity-trade and tourism links with China, but a 0.04-percentage-point reduction in growth is still small.

Such calculations assume that the coronavirus does not spread widely to these countries and cause direct havoc. This currently seems unlikely, given the low number of cases outside China.

Of course, the impact on China and other economies could be more severe if the coronavirus crisis were to last much longer than this baseline scenario assumes.

In that case, it is important to remember that Chinese policy makers still have room for both monetary and fiscal expansion: the banking-sector reserve ratio is relatively high, and the share of public-sector debt to GDP is still manageable compared to China’s international peers. By using this policy space when necessary, China’s authorities could limit the ultimate impact of the current health crisis.

The coronavirus outbreak is understandably causing alarm in China and elsewhere. But from an economic perspective, it is too early to panic.

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