The fast-spreading coronavirus could slow first quarter growth of the United States economy, according to a new report from Goldman Sachs.
Analysts at the firm forecast a 0.4 percentage point decline on US annualized growth through March. But it’s not all doom and gloom: Goldman Sachs (GS) also predicts that growth will rebound in the second quarter by roughly the same amount.
The note said that it doesn’t “find a clearly discernible effect of past pandemic scares on aggregate US activity.” Overall, analysts predict the coronavirus will result in “only a small net drag” for the full year. Reasons for the slight decline are a decrease in Chinese tourists to the US and fewer exports to China.
Other factors could hamper US economic growth, however.
“While the housing and labor markets have been particularly positive, the auto market has been sliding and market volatility has posed some challenges, especially at the beginning of Q4,” said Steve Rick, chief economist at CUNA Mutual Group.
The virus is likely to do more damage to China’s economy, where there are nearly 10,000 cases as of Friday. Some economists are predicting that the economic impact could be worse than the 2003 SARS outbreak because coronavirus is spreading rapidly and coincides with the Lunar New Year travel rush.
Before the outbreak escalated this month, the International Monetary Fund and the World Bank had forecast China’s annual economic growth to fall to about 6%, down from 6.1% in 2019.
At least 200 people have died in China from the virus. There are more than 140 confirmed cases of Wuhan coronavirus – but no deaths so far – in more than 20 countries outside of China.
–CNN Business’ Laura He contributed to this report.