China can fortify stimulus if growth slows further amid virus spread, IMF says

12.02.2020 - Evdokimov Roman
China can fortify stimulus if growth slows further amid virus spread, IMF says

China will strengthen stimulus if economic slowdown continues amid virus spread, Changyong Rhee, senior official at International Monetary Fund said. But China should not disregard structural reforms to cater rapid credit growth, he added.

Rhee, director of the IMF’s Asia and Pacific Department, said that China’s economic growth was slowing down before the epidemic due to the government’s measures to deleverage the economy.

To support the economy, Beijing is likely to rely on stimulus, even if the growth will be smaller than previous fiscal measures that prioritized large infrastructure spending.

Policymakers implemented steps to underpin the economy while investors worried about the epidemic. The virus death toll stood at 1,113 by the end of Tuesday.

The World Health Organization said that the virus posed a global threat worse than terrorism.

Rhee said that the virus has already added risks to the growth outlook of the region even if it was too early to estimate its impact.

Rhee added that it was undeniable that the virus will affect China and countries close to it, more so on Asian tourism.

Seventy percent (70%) of tourists in Hong Kong are from mainland China, while in Japan and South Korea, it makes up for 30%.

Rhee did not reveal figures to the potential impact of factory shutdowns in China to Asian economies and companies. He said that it will all depend on how fast the epidemic will be contained.

Risk disclaimer "Market Solutions Ltd – Suite 305 Griffith Corporate Centre P.O. Box 1510 Beachmont, Kingstown, St Vincent and the Grenadines is a financial services institution outside the European Union Area, which is subject to the supervision of the IFMRRC Certificate 0395 AA V0128 Trading in Forex/ CFDs and Other Derivatives is highly speculative and carries a high level of risk. It is possible to lose all your capital. 70% of trading deals can be unprofitable. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent advice if necessary. Speculate only with funds that you can afford to lose. This Website may contain information in particular regarding financial services and products that could be regarded b a E.U. supervisory authority as an offer of financial services targeted in Europe. ESMA intervention measures do not apply to customers of Market solutions Ltd and it is your responsibility to choose a company which is most suitable for your trading needs. By clicking continue you confirm that you have read, understood and agree to the risk disclosures, terms of service, cash policies, privacy policies and this notice and that you are visiting this website on your own initiative, without any encouragement whatsoever from or Market Solutions limited." Cookies notification: “We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we assume that you are happy with it. Continue

Help with deposit?