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Reserve Bank of Australia expects coronavirus to weaken the economy, worse than SARS

How the coronavirus could destroy Australia’s already fragile economy, as experts say it will be worse than earlier outbreaks

  • The Reserve Bank of Australia discussed the corona virus at its meeting in February
  • COVID-19 is expected to be worse for the economy than the SARS 2003 outbreak
  • RBA also expects coronavirus, forest fires to weaken the economy in the short term
  • Apple has announced that it would reduce iPhone production in central China

The coronavirus is expected to hit Australia’s already fragile economy and be worse than previous Chinese outbreaks of diseases.

Now that 15 Australians are diagnosed with flu-like illness, there are fears that COVID-19 anxiety could become a pandemic.

The American tech giant Apple has also announced that iPhone production in China would probably be ‘limited’, which led to a worldwide shortage of smartphones.

Fourteen days after the first cases were unveiled, the Reserve Bank of Australia discussed the possible effects on the economy at its first board meeting for 2020, which was held in early February.

“Members discussed the coronavirus outbreak and noted that it was a new source of uncertainty for the global economy,” said the central bank minutes released Tuesday.

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The Reserve Bank expects the coronavirus to hit the economy and be worse for Australia than previous outbreaks of diseases that originated in China. Shown are passengers wearing protective face masks at Brisbane International Airport in January

The Reserve Bank expects the coronavirus to hit the economy and be worse for Australia than previous outbreaks of diseases that originated in China. Shown are passengers wearing protective face masks at Brisbane International Airport in January

“It was too early to determine to what extent growth in China would be affected or the nature of the international spill-over effects.”

The central bank left interest rates at a low of 0.75 percent this month, but predicted that Australia’s already weak economic growth rate would be ‘weaker’ in the short term due to the effects of the summer fires and the corona virus.

The RBA expects the coronavirus to be worse than the outbreak of SARS in 2003, also known as the severe acute respiratory syndrome.

In contrast to 17 years ago, China is now Australia’s largest trading partner and an even larger buyer of Australian iron ore, coal and university education.

“China now accounted for a much larger part of the global economy and was more closely integrated, including with Australia, than in 2003 at the time of the SARS outbreak,” the RBA said.

“The economic effects would depend to a large extent on the continuation of the outbreak and the measures being taken to limit the spread.”

The corona virus is already affecting global production output. Apple announced it had reduced iPhone production in China. Pictured is a stock image of women using an iPhone

The corona virus is already affecting global production output. Apple announced it had reduced iPhone production in China. Pictured is a stock image of women using an iPhone

The corona virus is already affecting global production output. Apple announced it had reduced iPhone production in China. Pictured is a stock image of women using an iPhone

The corona virus is already affecting global production output. Apple announced it had reduced iPhone production in China.

“Worldwide offer from iPhone will be temporarily limited,” said an investor update this week.

“These iPhone shortages will temporarily affect global revenue.”

Apple iPhones are mainly produced in Shenzhen, north of Kong Hong.

They are not made in Hubei province in central China, where the city of Wuhan is located, where the corona virus outbreak occurred in January.

Apple, however, expected iPhone production to slow down as Chinese demand for its products fell.

Earlier this month, Qantas suspended direct flights from Sydney to Beijing and Shanghai until March 29.

China was Australia’s fifth most popular overseas destination last year, with 608,000 journeys made there in 2019, data from the Australian Bureau of Statistics on Tuesday revealed.

Australians spent an average of 17 days there during their visit.

This week, Prime Minister Scott Morrison announced that foreigners who had visited China would be denied entry to Australia for another week, starting February 15.

In July 2003, just four months after SARS reached Hong Kong, the Australian Treasury Department described the outbreak as something that “would only have a mild and temporary impact on the Australian economy.”

AUSTRALIA WITH THE CORONAVIRUS

NEW SOUTH WALES: 4

January 25

  • Three men, 43, 53 and 35 years old who had recently traveled to China, have confirmed that they have contracted the disease.
  • Two flew in from Wuhan, while the other arrived in Sydney from Shenzhen, South China.
  • They are treated in isolation at Westmead Hospital and are in a stable condition.

January 27

  • A 21-year-old woman is identified as the fourth person who tested positive for the disease in NSW.
  • The woman, a student at UNSW, flew the MU749 to Sydney International Airport on January 23 and presented to the emergency department 24 hours later after developing flu-like symptoms.
  • She is treated in isolation at Westmead Hospital.

VICTORIA: 4

January 25

  • A Chinese citizen aged fifty will be the first confirmed case of the corona virus in Australia.
  • The man flew from Wuhan via Guangzhou to Melbourne on January 19 on the Southern Southern flight CZ321.
  • He is now in quarantine at the Monash Hospital in Clayton in the east of Melbourne.

January 29

  • A Victorian man in his sixties is diagnosed with the corona virus.
  • He became unwell on January 23 – two days after his return from the Chinese city of Wuhan, the epicenter of the outbreak.
  • The man was confirmed as positive on January 29 and was subsequently seen by doctors at the Monash Medical Center. He was rated good enough to stay at home.

January 30

  • A woman in her forties has a corona virus.
  • She was visiting from China and mainly spent time with her family.
  • She is being treated at the Royal Melbourne Hospital.

February 1

  • A woman in her twenties in Melbourne appears to have the virus

QUEEN COUNTRY: 5

January 29

  • Queensland confirms its first case after a 44-year-old Chinese subject was diagnosed with the virus.
  • He is being treated at the Gold Coast University Hospital.

January 30

  • A 42-year-old Chinese woman who traveled in the same Wuhan travel group as the 44-year-old man tested positive. She is in a stable state at the Gold Coast University Hospital.

February 4

  • The corona virus has been diagnosed in an eight-year-old boy. He also comes from the travel group where the other Queensland cases came from

February 5

  • The case was found in a 37-year-old man who was a member of a group of nine Chinese tourists in quarantine on the Gold Coast

February 6

  • A 37-year-old woman was diagnosed with the corona virus of the same travel group that flew from Melbourne to Queensland on January 27

SOUTH AUSTRALIA: 2

February 1

  • A Chinese couple in their sixties who arrived from Wuhan in Adelaide to visit relatives confirmed that they have coronavirus.

CHINA: 2

January 30

  • It has been confirmed that two Australians have the virus in Wuhan itself. Australia has increased the travel alarm level to ‘not traveling’ for the city of Wuhan – the epicenter of the outbreak – and for the entire Hubei province.
  • Chief Medical Officer Brendan Murphy says that unless people are in contact with someone who doesn’t feel well and comes from that part of China, there is no cause for concern.

JAPAN: 15

  • From 15 February, 15 Australians are among the 219 confirmed cases of the corona virus contracted aboard the Diamond Princess cruise ship in Yokohama.

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