The Jakarta Post
A pneumonia-like illness outbreak caused by a new coronavirus in China is likely to cause more uncertainty in the global economy in 2020, according to a senior minister.
“The challenges to the global situation will continue in 2020 despite easing trade tensions,” said Coordinating Economic Minister Airlangga Hartarto in Jakarta on Tuesday, as quoted by Antara news agency.
Global manufacturing disruption and geopolitical tensions, aside from the new coronavirus, have also become the source of global economic uncertainty, he said.
The world is in a state of alarm after the 2019-nCoV virus, which bears similarities to the Severe Acute Respiratory Syndrome (SARS) virus, was first detected on Dec. 31 in Wuhan, China. The new strain of virus has infected more than 4,500 people in various countries around the world and had killed at least 106 in China as of Tuesday noon.
Countries including the United States, Australia, Japan, Singapore and Hong Kong have reported confirmed cases of the coronavirus infection.
Despite the downside risks, Airlangga said that governments from countries around the world had expressed optimism about economic development in 2020 during the World Economic Forum Meeting in Davos, Switzerland, earlier this month. Such optimism stemmed from the signing of the phase one trade deal between the United States and China, effectively reducing trade frictions between the world’s two largest economies.
“There is a positive signal from four continents in the world that recession is unlikely to happen,” said Airlangga.
The International Monetary Fund (IMF) estimated that the global economy expanded by 2.9 percent last year, a downward revision of 0.1 percentage points and the slowest pace since the global financial crisis, with trade friction weighing on exports and investment.
The IMF projected global growth to pick up to 3.3 percent in 2020 and 3.4 percent in 2021.
Airlangga added that the country's economy could still grow at more than 5 percent driven by domestic consumer spending and investment. (awa)