The IMF expressed its sympathy and condolences to the victim of the Corona virus outbreak in China, while saying it is too early to assess the ultimate economic impact, spokesman Gerry Rice told reporters Thursday in Washington, DC.
“We would also expect that much of these effects could be temporary and be reversed once the virus retreats. As roads and airports open up again, people go back to work and firms make up for lost business. So again. You know, a lot of uncertainty and very difficult to quantify. And the overall impact on the Chinese economy will depend on how long it will take before we we get to that point of reversal,” Rice said.
Rice expressed confidence that the government was working in tandem with the World Health Organization and other international partners to contain the spread of the virus.
“Clearly, the authorities are taking this very seriously, and China is a large economy with the resources and the resolve to effectively meet this challenge. We think it’s very helpful that the authorities, the Chinese authorities are working closely with the World Health Organization and others, including by sharing information about the disease and the measures taken,” he said.
There were certain to be immediate impacts on China’s domestic economy including the shutdown of transport and factories that could eventually disrupt global supply chains.
“China has the fiscal space to act if needed. It will also be important to make sure that households and firms have access to credit, too. To bridge over any temporarily difficulties. And again, this is something that Chinese authorities have indicated they will be doing,” Rice said.
The so-called economic ‘spillover’ effects would be most felt among China’s Asian neighbors, including the loss in tourist revenue.
“If it’s a small impact on China, the relative impact on the rest of the global economy would be smaller. Here we’re looking mostly at a reduction in the number of Chinese people traveling abroad. The slowdown in imports, along with domestic economic activity. And given the close ties, China’s close ties with the region, Asia would likely be most effect affected,” Rice added.
And Lebanon has not asked the IMF for a financial assistance package at this point, Rice said. That country has a partnership with the IMF to provide technical expertise and learning, but that is not the same as financial aid, Rice clarified.
“There’s been no request for financial assistance from the Lebanese government government to the IMF. However, we are providing technical assistance. So no financial assistance. But we are providing technical assistance, which means, you know, economic advice.”