DBRS Morningstar Releases Commentary on the Impact of Coronavirus on China

DBRS Morningstar released a commentary titled “Coronavirus a Challenge for China’s Economy”

The commentary discusses DBRS Morningstar’s preliminary conclusions of the likely impact of the Coronavirus on China. If there is an effective policy response, the economic effects are likely to be contained to 1-2 quarters. However, it is too early to tell how quickly and how long the virus will continue to spread.

The virus has been compared to the SARS (Severe Acute Respiratory Syndrome) epidemic in 2003, in part due to its nature and geographic origins. It may also have a similar macroeconomic impact on China (A (high), Negative trend) and other countries. China’s weight in global growth at the time of SARS was a modest 4%, compared with the 17% share of global GDP today. Therefore, DBRS Morningstar takes the view that while the economic impact is uncertain, it could be materially greater than SARS.

DBRS Morningstar continues to monitor the Coronavirus situation for potential impact on its global sovereign ratings.

The commentary titled "Coronavirus a Challenge for China’s Economy" is available at www.dbrs.com.

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