The impact of the coronavirus means aggregate EM GDP is likely to have contracted in q/q terms for the first time since the global financial crisis in Q1. If the outbreak is contained quickly, most lost output should be recovered later in the year. But if the virus spreads further or supply chain disruptions persist for much longer, we think this could plausibly knock as much as a percentage point off EM growth this year. And EM asset prices would suffer renewed falls.
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