The coronavirus outbreak's impact on the world economy grew more alarming on Saturday, even after President Donald Trump denounced criticism of his response to the threat as a “hoax" cooked up by his political enemies.
China’s manufacturing plunged in February by an even wider margin than expected after efforts to contain the virus outbreak shut down much of the world’s second-largest economy, an official survey showed Saturday.
The survey, coming as global stock markets fall on fears the virus will spread abroad, adds to mounting evidence of the vast cost of the disease that emerged in central China in December and its economic impact worldwide.
The monthly purchasing managers’ index issued by the Chinese statistics agency and an industry group fell to 35.7 from January’s 50 on a 100-point scale on which numbers below 50 indicate activity contracting.
Elsewhere around the world, already slumping financial markets dropped even lower on Friday, while virus fears led to emptied shops and amusement parks, canceled events, and drastically reduced trade and travel.
Despite anxieties about a wider outbreak in the US, Trump has defended measures taken and lashed out Friday at Democrats who have questioned his handling of the threat, calling their criticism a new “hoax” intended to undermine his leadership.
Shortly before Trump began to speak, health officials confirmed a second case of coronavirus in the US in a person who didn't travel internationally or have close contact with anyone who had the virus.
Some Democrats have said Trump could have acted sooner to bolster the US response to the virus. Democratic and Republican lawmakers also have said his request for an additional $2.5 billion to defend against the virus isn't enough. They've signaled they will provide substantially more funding.
The head of the World Health Organization on Friday announced that the risk of the virus spreading worldwide was “very high," while UN Secretary-General Antonio Guterres said the “window of opportunity" for containing the virus was narrowing.
Stock markets around the world plunged again Friday. On Wall Street, the Dow Jones index took yet another hit, closing down nearly 360 points. The index has dropped more than 14% from a recent high, making this the market's worst week since 2008, during the global financial crisis.
In Asia, Tokyo Disneyland and Universal Studios Japan announced they would close, and events that were expected to attract tens of thousands of people were called off, including a concert series by the K-pop group BTS.
Tourist arrivals in Thailand are down 50% compared with a year ago, and in Italy — which has reported 888 cases, the most of any country outside of Asia — hotel bookings are falling and Premier Giuseppe Conte raised the specter of recession. The Swiss government banned events with more than 1,000 people, while at the Cologne Cathedral in Germany, basins of holy water were emptied for fear of spreading germs.
In a report published Friday in the New England Journal of Medicine, Chinese health officials said the death rate from the illness known as COVID-19 was 1.4%, based on 1,099 patients at more than 500 hospitals throughout China.
Assuming there are many more cases with no or very mild symptoms, the rate "may be considerably less than 1%," US health officials wrote in an editorial in the journal. That would make the virus more like a severe seasonal flu than a disease similar to its genetic cousins SARS, severe acute respiratory syndrome, or MERS, Middle East respiratory syndrome.
Given the ease of spread, however, the virus could gain footholds around the world and many could die.
Europe's economy is already teetering on the edge of recession. A measure of business sentiment in Germany fell sharply last week, suggesting that some companies could postpone investment and expansion plans. China is a huge export market for German manufacturers.
Economists have forecast global growth will slip to 2.4% this year, the slowest since the Great Recession in 2009, and down from earlier expectations closer to 3%. For the United States, estimates are falling to as low as 1.7% growth this year, down from 2.3% in 2019.
But if COVID-19 becomes a global pandemic, economists expect the impact could be much worse, with the US and other global economies falling into recession.
