Fitch Ratings releases a report in relation to the situation
They say that the scale of the new coronavirus outbreak would need to expand substantially to have a significant impact on corporate and sovereign credit ratings.
Adding that an increase in scale would put companies exposed to travel and tourism at most risk, including global airlines, gaming, lodging and leisure sectors. Further noting that the macroeconomic impact would initially hit Asia if the outbreak spreads.
They highlight countries such as Thailand, Vietnam, and Singapore as those that will likely be more affected due to their strong service sectors.
Yup, if there is any lesson to be learned from the SARS virus outbreak in 2002-03, it is that the services sector is the most vulnerable. And this is why this new coronavirus poses a much bigger risk to the global economy today than SARS did back then.
For one, China is a much stronger economic force and accounts for a bigger portion of global growth now than it did almost two decades ago. Add that to the fact that the world has become increasingly reliant on services over the years, it is a double whammy.
Not to mention there's also the advancement in infrastructure and technology to account for, whereby world travel these days is so easily accessible, it also increases the risks of a major epidemic in a shorter amount of time.
