SINGAPORE (Jan 29): The deadly conoravirus that has infected thousands and killed dozens so far may hit the Chinese economy harder than the spread of SARS in 2003, according to research analysts from Nomura Global Market Research.

And Singapore is among the countries expected to be hit the hardest from the negative spillover effects of the outbreak, the financial services group says.

The SARS-like virus, which originated from Wuhan in central China, has seen the number of confirmed cases in China soar to 5,974 – overtaking the country’s official count of SARS patients. The death toll from the coronavirus has jumped to 132.

Outside mainland China, an increasing number of countries and regions – including Singapore, Hong Kong, Macau, Thailand, the US, Australia, Japan, and South Korea – have confirmed their first cases of infection.

“The worst is yet to come,” Nomura says in a report on Wednesday. “Based on our study of the coronavirus’ characteristics and the Chinese government’s responses thus far, we reckon the coronavirus could deal a more severe blow to China’s economy in the near term relative to SARS in 2003.”

For one, the Wuhan virus outbreak around the Lunar New Year holiday could be more disruptive to China’s economy, Nomura says.

And while less deadly than SARS, the long incubation period of the coronavirus makes it especially contagious. The Wuhan coronavirus can be infectious for as many as 14 days before any symptoms are felt, which significantly increases the difficulty in detecting the virus and containing its spread.

“After its initial slow reaction, the Chinese government now finds itself firing on all cylinders in an effort to contain the virus,” Nomura says. “In addition to taking a direct course of action against the virus, we expect Beijing to introduce a raft of measures to provide liquidity and credit support to the economy.”

The economic impact of the coronavirus outbreak is expected to spread to Asean, with Singapore and Thailand among the most vulnerable.

In Asean, the number of cases has risen further this week, prompting policy responses to step up, which include travel restrictions on tourists from China.

“These open economies are also at a greater risk from any negative spillover effects due to a slowdown in China’s economy. During the SARS outbreak in 2003, the slowdown in services exports in these economies was mostly offset by a double-digit growth in goods export. In contrast, export growth currently remains tepid and this has had a negative spillover on domestic demand,” Nomura says.

“Overall, we reiterate our view that there are downside risks to our 2020 growth forecasts due to the 2019-nCOV outbreak, particularly in Thailand and Singapore,” it adds.