World News

S&P Global chops China 2020 forecast on coronavirus worries

LONDON (Reuters) – S&P Global Ratings cut its Chinese 2020 growth forecast to 5%, down from 5.7% on Friday, saying the impact of the coronavirus outbreak could take a heavy short-term toll.

“Most of the economic impact of coronavirus will be felt in the first quarter, and China’s recovery will be firmly in place by the third quarter of this year,” said Shaun Roache, Asia-Pacific chief economist for S&P Global Ratings.

S&P said a 1 percentage points slowdown in China’s growth rate would likely have a “material effect” on global expansion.

At the same time, to reflect a likely bounce back, it upgraded its 2021 China growth forecast to 6.4%, up from its previous estimate of 5.6%. It added its baseline assumption was that the virus would be contained by this March.

(Reporting by Tom Arnold; editing by Marc Jones)