How China’s coronavirus epidemic could hurt the world economy

Covid-19 brings many unquantifiable risks

When shocks hit the global economy, Wall Street looks to history to see what will happen next. The outbreak in China of covid-19, a respiratory disease, invites a comparison to the last one, sars. In that outbreak in 2003 China suffered a sharp hit to its growth, followed by a strong rebound. Although covid-19 has now claimed more lives than sars, investors remain optimistic that its economic effects will follow a similar path.

On February 13th Hubei province, centre of the outbreak, announced 14,840 new confirmed cases, a sharp rise. That was because it suddenly started including ct-scan diagnoses, not just specific tests for the virus. Although the statistical fog is thick, indicators such as the fall in new cases outside Hubei and the total of suspected cases suggest that the rate of fresh infections may be trending lower.