3 to 9 February: Policymakers will remain vigilant

If it was not for the coronavirus, global economic growth would have a promising outlook for 2020. This idea was underpinned by the sustained improvement in the global manufacturing PMI, which rose to a nine-month high of 50.4 in January. However, since the survey was conducted before the coronavirus outbreak, the conclusion might not be as solid as in regular circumstances. The question is to what extent the Chinese and vis-a-vis the global economy will be impacted by the viral outbreak and what proportion of the loss in output is permanent. We are aware that the uncertainties related to the magnitude of the supply chain disruptions due to the shut down of plants and thus we remain cautious with our economic outlook. We are of the view that policymakers (especially in China) are closely monitoring economic developments and will step in with policy support to avoid a scenario where economic growth sharply slows.

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