Covid-19: Three scenarios, growth and policy implications for Asia ex-Japan
The three scenarios are based on when Covid-19 peaks and how quickly production activity can resume in China.
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THE potential macroeconomic impact of the Covid-19 outbreak is now being debated in terms of a temporary interruption to Asia ex-Japan's nascent growth recovery versus derailment of such growth - as determined by the severity and duration of the episode.
The bullish argument is that a sharp but short dent to growth in the first quarter of 2020 would lead to more policy support and eventually a sharp growth snapback.
The bearish counter-argument is that a one-two punch to a nascent recovery that is still finding its feet amid an already lower growth starting point as compared with previous public heath episodes would knock out any remaining self-sustaining momentum in the cycle.
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