Coronavirus may hit global GDP by over $250 bn: Industry body

The coronavirus outbreak may negatively impact global growth by 30 basis points or USD 250 billion, industry body PHDCCI said on Thursday. PHDCCI President D K Aggarwal said disruptions in the global supply chains will not only hit China's exports but also the exports of the importing countries as they import a large chunk of raw materials and intermediate goods from China while exporting to other respective destinations.

"At this juncture, we need to boost our domestic consumption demand and domestic capacities to mitigate the likely impact of coronavirus on global trade," said Aggarwal, adding that sectors such as pharmaceuticals, solar and iron and steel have been facing disruptions in imports of raw materials from China due to the outbreak of the virus. According to Aggarwal, as China is a major player in global trade, contributing around 13 per cent in world merchandise exports, exporting majorly to the US, Hong Kong, Japan, Korea, Vietnam, Germany, India, Netherlands, among others, the impact on global trade would undermine the growth prospects of the world economy.

He said the outbreak has the potential to cause considerable global economic and market dislocation, however, the economic impact of the disease will depend on its duration and severity. "The continuous spread of coronavirus may impact global growth by 0.3 percentage points which becomes more than USD 250 billion," Aggarwal said. "Going ahead, India should strengthen its supply chain to regain its lost market share as the country is moving up in terms of Ease of Doing Business and competitiveness of businesses along with market access opportunities," he added.