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Fears of economy being hit grow as India’s first coronavirus victim is confirmed

NEW DELHI: As news of a confirmed coronavirus patient in Kerala along with confirmed suspected cases in Philippines, Singapore, South Korea, Australia, Canada, France, Japan, Malaysia and Vietnam hit the wires, Mumbai’s Sensex fell from a day’s high of 41,301 to 40,874 as domestic investors joined foreign institutional investors in bear run on global markets.

Japan’s Nikkei fell by 2 per cent as did Stoxx 600 which tracks a broad number of European bourses, while USA’s Dow Jones Industrial Average fell 1.3 per cent.

Economists fear that the global economic contagion from the new virus would be far more than that suffered by the world and Asia-Pacific region during the 2003 SARS crisis. The Severe Acute Respiratory Syndrome also came from China, killing about 800 people and costing the global economy an estimated $33 billion, or 0.1 per cent of world GDP, in 2003.

‘China has more economic heft now and any disaster which impacts the Chinese economy would certainly impact world GDP,’ said Prof Ravi S Srivastava, former Chairman of the Centre for Regional Studies, JNU. China last year accounted for 16 per cent of global GDP compared to 4 per cent of global GDP in 2003.

India’s economy which has been suffering the crippling effect of a demand slowdown coupled with high unemployment rates needs a benign global economic outlook to be able to regain its mojo.

A prolonged virus scare with its negative impacts on the global economy is likely to hurt India where growth decelerated to just 4.5 per cent in the July-September 2019 quarter, the slowest growth rate in six years, with factory output in negative territory for three consecutive months.