February 4, 2020 / 11:54 AM / 18 days ago

Virus outbreak key risk to Asia sovereign credit support - S&P Global

A man wearing a mask walks through closed stores in Shanghai, China, as the country is hit by an outbreak of a new coronavirus, February 4, 2020. REUTERS/Aly Song

LONDON (Reuters) - Rating agency S&P Global warned on Tuesday that the coronavirus outbreak had become the key risk for Asia-Pacific sovereign credit support and could hit the ratings of carmakers, banks and other sectors if prolonged.

“If the disease is not swiftly brought under control, slower economic growth would exacerbate already weaker fiscal performance in many parts of Asia-Pacific,” a report by a group of S&P analysts said.

It added that a “back of the envelope calculation” suggested that if spending on consumption services fell by 10% in China, overall GDP growth would fall by about 1.2 percentage points in 2020.

Reporting by Marc Jones; editing by Sujata Rao

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