The International Monetary Fund said Monday that it supports China’s efforts to contain the coronavirus outbreak and is confident that the country’s economy is resilient.
“We support China’s efforts to respond by taking measures with all the strength of its health system, but also by the recent fiscal, monetary and financial actions. We are confident in the resilience of China’s economy,” IMF Managing Director Kristalina Georgieva said.
As of midnight Sunday, China’s finance authorities have allocated 47 billion yuan (about $6.8 billion) for the coronavirus prevention and control work, according to China’s Ministry of Finance.
The number of confirmed deaths from the coronavirus outbreak rose to 425 in China, after authorities in Hubei province reported 64 new fatalities on Monday, China’s National Health Commission said on Tuesday.
The province, the epicenter of the infection, also confirmed 2,345 new cases of infection, putting the nation’s total slightly over 20,000, according to the commission.
The gloomy situation has fueled some speculation that the current outbreak would have larger negative economic impact than the 2003 SARS (severe acute respiratory syndrome) episode.
The New York Times, for example, headlined on Monday: “SARS Stung the Global Economy. The Coronavirus Is a Greater Menace.”
The IMF chief said there could be some negative impact on sectors such as tourism and manufacturing for the first quarter of the year. Beyond that, the influence has yet to be seen.
“The immediate impact is obvious. We have travel, tourism, manufacturing in China and a little bit beyond China (that) may initially be impacted,” she said in a video posted on her Twitter account Monday.
“China has taken very dramatic actions to restrict the spread of the virus, and work is underway on a vaccine. So let’s say for this quarter there will very likely be a negative impact. What would happen beyond this quarter we must observe and assess,” Georgieva said.
“Stay strong China! Stay strong Wuhan!” the Bulgarian economist said in Chinese.
Chinese analysts have said sectors bearing the brunt of the viral outbreak, such as transportation, retail and catering, are expected to see rapid recovery in one to three months once the contagion is gone.
The coronavirus epidemic will have only a “temporary impact” on China’s economy, and the country’s good economic fundamentals for long-term growth remain unchanged, according to Lian Weiliang, deputy chief of the National Development and Reform Commission.
The country’s economic strength, resources and abilities to deal with emergencies have been significantly ramped up since the 2003 SARS outbreak, Lian said at a news conference on Monday.
The IMF’s sister lending institution, the World Bank, also said Monday that it is monitoring the wider economic and social impact of the outbreak. It is reviewing financial and technical resources that can be mobilized quickly to support affected countries and assist the life-saving work underway to stop the transmission of and mitigate the impact of the virus.
“We support China’s efforts to respond including its efforts to maintain resilience in its economy,” the World Bank said in a statement.
“Our sympathies to all affected by the serious situation related to #Coronavirus. The Chinese authorities have policy space to respond & have announced a sizeable injection of liquidity, which should help mitigate the costs to economic growth,” the World Bank tweeted on Monday.
Last Wednesday, World Bank Group President David Malpass said the global lender “stands together with the people of China at this challenging time”.
“Our team is already in discussion with relevant authorities on possible ways we might support China and its people,” he said. “Our immediate support could include, for example, technical assistance on disease surveillance, food safety and crisis response, sharing international experiences on managing similar crises, and impact analysis of the outbreak on the Chinese economy.”
The World Tourism Organization, the specialized United Nations agency for tourism, also expressed its solidarity with China and its confidence in the resilience of China’s tourism industry.
It said in a statement Friday that China has emerged as a “true global tourism leader” both as a source market and as a leading destination in itself.
“Tourism will offer a valuable lifeline as China recovers and rebuilds from this setback, just as the sector has proven its resilience many times before,” it said.