MOSCOW, January 28. /TASS/. The new coronavirus outbreak in China may cause a far more significant influence on the growth rates of the world and Russian economies than the severe acute respiratory syndrome (SARS) did in 2003, the National Credit Ratings (NCR) agency has said. In its opinion in a situation like this Russia’s Central Bank will prefer to watch and wait without revising the key rate at its forthcoming meetings.
"The effects of the current coronavirus on the world economy may turn out far more noticeable than the SARS outbreak in 2003. The number of tourist and business trips to China is dwindling. The first bans have been introduced already, which will influence the industries servicing tourists and businessmen. Logistic restrictions may hit other industries of the Chinese economy in the near future, which will harm the trade turnover with the biggest trading partners. Even a minor fall in the Chinese economy may add to the volatility of the world oil market and global trade, thus putting more pressure on the ruble and pushing up inflation risks," the rating agency said.
In a situation like this "the Bank of Russia will most probably prefer to watch and wait, without changing the key rate in the near future."
The NCR believes that even the first measures taken, such as the prolongation of New Year holidays in China and the introduction of harsh quarantine measures, may slow down China’s GDP this year by approximately 0.5% in contrast to last year’s to 5.6%.
"The coronavirus has already infected world markets of commodities, including Russia’s most important oil market. The price of Brent crude has been down $9.7 (14%) per barrel this year, largely on news from China. In February-May 2003 oil was down by one-third to $23.4 per barrel. The main reason then was Iraq, and not SARS," the agency’s commentary runs.