So far, the corona virus seems to be a “manageable problem” for the Austrian economy, says the head of the Institute for Advanced Studies (IHS), Martin Kocher. Even in the event that the situation in Italy gets worse, as of today, one expects a minus of a maximum of 400 to 500 million euros or a good 0.1 percent of the economic output, he explained on Saturday.
However, the IHS has not yet taken into account the situation in Germany, which is even more important for Austria than that in Italy, as it was said in a broadcast. The institute is cautiously optimistic about the situation in China. “If one continues to calculate the infection dynamics in the Hubei region, the corona virus could be largely under control by the end of April,” said IHS health economist Thomas Czypionka. This would largely normalize economic activity in China in the second quarter.
“Our investigation shows that the economic costs of a containment or slowdown strategy are manageable,” said Czypionka on the further course of action at the political level. However, it is important to bear in mind that infections follow exponential growth, ie they can increase rapidly if containment is insufficient and have far greater consequences: “Therefore, the short-term costs of a decisive containment strategy should also be accepted if necessary in order to increase possible medium-term costs to reduce.” (Apa / KLE)
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