Virus economic impact ‘deeper, longer, wider’ than SARS
The 2003 SARS outbreak wiped out $40 billion internationally. Now Australia’s top finance boss has revealed the ‘deep’ impact coronavirus is expected to have on the Australian economy and that it could plunge us into recession.
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THE economic impact of COVID-19 will be “deeper, longer and wider” than the deadly SARS virus in 2003, which wiped $40 billion off the global economy, the head of Treasury has revealed.
Treasury boss Stephen Kennedy revealed the virus was already expected to shrink the Australia economy by 0.5 per cent in the March quarter – the same amount it just grew by in the past quarter.
Dr Kennedy has spoken after a hook-up with treasury bosses from around the world and the International Monetary Fund last night.
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The figures used are taking into account the impact it has already had on tourism and education sectors, but not supply-chain troubles, which are also beginning to be seen.
It is feared the coronavirus impact could push Australia into recession.
Dr Kennedy said the shock from the outbreak would last into the June quarter and beyond.
“The impact of SARS took on a V shape, a sharp, relatively-contained reduction in activity, mostly in Asia, followed by a quick bounce back,” he said.
“The economic impact of COVID-19 is likely to be deeper, wider and longer when compared with SARS.
“It will create more risk of a prolonged downturn and fiscal support will be needed to accelerate the recovery of the economy, especially once the health and health management effects of COVID-19 begin to fade.”
He said there was good news, with the nation’s finances in a stronger position to deal with the situation, than many others around the world.
“The Australia economy is well placed to respond to this shock,” Dr Kennedy said.
“It will be longer term than SARS, but we will recover on the other side.”
The treasury boss said government assistance should be targeted to industries most impacted, like tourism and education, as well as the financial sector.
Dr Kennedy said some businesses were unaffected by the virus so far, with the mining sector, for example, “enjoying good growth” and commodity prices not falling.
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