From an RBC note on the projected impacts of the COVID-19 outbreak
This on Europe (in brief):
- several ECB policymakers have acknowledged the potential negative impacts of the COVID-19 outbreak to euro area growth.
- China's contribution to Euro GDP has evolved since SARS … In 2003, euro area exports to China were around 0.5% of euro area GDP versus 1.5% now
- Around 7.7% of total euro area exports go to China making it the third-largest goods export destination
- Given the already fragile state of the euro area manufacturing sector, and that much of the growth in euro area exports in Q4 was due to China, this amplifies the potential near-term economic impacts of COVID-19 to euro area growth and, in particular, the manufacturing sector in the first quarter of 2020.
