Coronavirus’ economic impact in East and Southeast Asia

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East Asia Forum

Economics, Politics and Public Policy in East Asia

and the Pacific

https://www.eastasiaforum.org

Coronavirus’ economic impact in East and Southeast Asia

4th March, 2020

Author: Anne Oeking, AMRO

As the number of coronavirus cases continues to rise around the world, there are deep

concerns over the potential economic impact of the virus. The virus originated in China, and

given the size of China’s economy, 

a slowdown

 

[1]

 there from the COVID-19 outbreak will spill

over to the rest of the ASEAN+3 region. The ASEAN+3 Macroeconomic Research Office

(AMRO) 

estimates

 

[2]

 that the COVID-19 epidemic could deduct as much as half a percentage

point from the economic growth of some regional economies in 2020.

Outside of China, the impact is also being felt in the rest of the ASEAN+3 economic bloc, which

comprises the 10 member states of the Association of Southeast Asian Nations as well as

China, Japan and South Korea — through three main channels.

The most immediate impact on the region has been the disruption to travel, tourism and related

industries. Flight suspensions, travel advisories, restrictions and bans on visitors from China,

China’s order to stop outbound travel groups and a more cautious approach to travel owing to

fear of contagion have all led to a sharp drop in tourism in the region — both Chinese tourists as

well as those from other countries.

During the SARS outbreak in 2002–2003, tourism from China to countries such as Japan, South

Korea, Malaysia, Singapore and the Philippines dropped by as much as 50 to 90 per cent

before rebounding fully the following year. But regional economies have become much more

dependent on Chinese tourism since then. Today, visitors from China make up around 40 per

cent of all tourist arrivals in the region — up from less than 20 per cent before SARS. Even a

relatively short-lived embargo on Chinese travel will have a much bigger impact this time

around, even if the subsequent rebound is strong enough to offset the initial pull-back.

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