An outbreak of the coronavirus in Australia would have more serious consequences for the economy across the board.
It’s already being felt. The share market is down, the tourism sector is hurting and universities are bracing for millions of dollars in losses.
“Expect that to get much worse if people panic”, Professor Warren Hogan of the University of Technology Sydney said.
Australia’s economic reliance on China means warnings of the superpower facing a recession due to travel and trade restrictions will hurt.
“Estimates of the impact of the containment policies on Chinese growth in the first quarter of the year range from minus 2 per cent to minus 10 per cent, enough to obliterate growth in the world’s fastest-growing big economy,” Prof Hogan said.
At the weekend, forecasts surrounding China’s manufacturing and service sectors were dire, he said, and “few countries are as exposed” to the impacts of that as Australia.
All of this on top of an already problematic set of economic circumstances – gross domestic product figures for the first three months of 2020 to be released tomorrow are unlikely to be rosy – also points to the possibility of a recession here.
“It will leave Australia exposed to what is known as a technical recession – two consecutive quarters of negative economic growth, in the three months to March and the three months to June,” Prof Hogan said.