Page 25 - ARUBA TODAY

BUSINESS Tuesday 25 February 2020
A25

Virus outbreak chills markets, outlook for global economy

By DAVID McHUGH boosted hopes for a mod-
AP Business Writer est upswing, particularly
FRANKFURT, Germany (AP) in Europe. Nowthe world
— The widening coronavi- economy could see its first
rus outbreak threatens to quarterly fall in season-
seriously disrupt the global ally adjusted output since
economy, just as it was the global financial crisisof
steadying itself against more than a decade ago,
headwinds from the U.S.- says Ben May, director of
China trade dispute. global macro research at
Amid concerns that glob- Oxford Economics.
al output could decline Frequent business and tour-
for the first time since the ism destinations for people
global financial crisis a little from China are already be-
more than a decade ago, ing hit hard, confirming that
stock markets sank Mon- this will be a key way that
day. In one sign of how sen- the pain will spread to oth-
timent has been negatively er Asian economies, with
hit, gold spiked 1.8% to Singapore and Hong Kong
$1,688 an ounce, its high- feeling the effects.
est level in seven years, as Comparisons to the 2003
traders sought out financial SARS epidemic, another
assets some consider safer deadly outbreak that origi-
in times of stress. Women wearing sanitary masks walk in downtown Milan, Italy, Monday, Feb. 24, 2020. nated in China, aren't re-
On Wall Street, the Dow Associated Press assuring because China's
Jones was down more than most acute near-term dif- "Given the latest develop- had died. Europeans had share of the global econ-
900 points during early af- ficulties as factories lie idle ments, one has inevitably been hoping for a modest omy is much bigger than it
ternoon Monday trading, and people remain home- to talk about downside upturn this year after ma- was back then, and supply
while in Europe, the pan- bound. But the ripple ef- risks for German export- jor economies staggered chains moving raw mate-
European Stoxx 600 slid fects are being felt all ers," said Andreas Rees, through a rough patch at rials, parts and products
3.6% after an eruption of around the world, as China chief German economist the end of the year. Ger- snake through the global
cases in Italy. Cases were is both a major importer of at UniCredit. Rees cited many showed zero growth economy more than ever.
also reported in new coun- goods as well as a source figures showing car sales in the fourth quarter, while Stock markets may have
tries in the Middle East. of parts through intricate in China fell 92% in the first the No. 2 and No. 3 econ- been slow to appreciate
"Compounded with the supply chains. Growth es- two weeks of February, and omies, France and Italy, the risk posed by the out-
already dramatic interrup- timates for China are al- pointed out that of the 21 shrank slightly. Two straight break because they hoped
tions to global supply chains ready being cut. million cars sold in China quarters of falling growth is central banks could step in
in China, traders fear that a Concerns are growing in last year, about 1 in 5 was one definition of a reces- with more stimulus.
rapid spread of the disease the 19-country eurozone, made either in Germany sion. The global economy Individual companies have
to other major economies whose three biggest econ- or through German invest- was just stabilizing after already reported trouble,
could be enough to tem- omies — Germany, France ment in China. Most Chi- wobbles caused by the most notably Apple, which
porarily tip global econom- and Italy — are stalling. nese auto showrooms are trade war between the said it will miss its sales tar-
ic growth into contraction Concerns over the knock- closed. U.S. and China and fears get. But it could take until
in the first half of the year," on effects on Germany, Eu- Meanwhile Italy's FTSE MIB of a disorderly British exit April or May before hard
said Matt Weller, global rope's export powerhouse, slumped 5.4% as Italian civil from the European Union. data on production and
head of market research at are particularly acute. protection officials said at The coronavirus hit just as a sales gives a clear picture
GAIN Capital. Germany's main DAX stock least 222 people had tested U.S.-China preliminary deal of the impact on a regional
China, the epicenter of market closed a whopping positive for the virus in the and a Brexit withdrawal or global level, Oxford Eco-
the outbreak, faces the 4% lower Monday. . country and that six people divorce agreement had nomics' May said. q