Passengers wear protective masks to protect against the spread of the Coronavirus as they arrive at the Los Angeles International Airport, California, on January 22, 2020. Image Credit: AFP

London: Finance leaders from across the world will gather in Saudi Arabia this week to discuss a global economy coming under increasing strain from the spread of coronavirus.

With the virus already shutting down commerce — and prompting the postponement of tech shows and sporting events — the Group-of-20 finance ministers and central bankers will be discussing a risk to growth that is growing bigger by the day and wouldn’t have figured in their outlooks at their last gathering. The meeting will kick off on February 22 in Riyadh, although some attendance may yet be disrupted by the virus.

Elsewhere, central banks in Turkey and Indonesia may cut interest rates, the Federal Reserve publishes minutes of its latest meeting, and the UK will releases a raft of hard data that will show the clearest signs yet of the economic impact of Boris Johnson’s election victory.

Here’s what happened last week and below is our weekly wrap of what else is going on in the world economy this week.


The deepening economic dislocation from the coronavirus in China and across the region remains the biggest issue for markets and policymakers. Singapore’s government has a chance to respond on Tuesday, when it announces its budget, while Indonesia’s central bank will be in focus on Thursday. Economists are split whether policymakers will cut rates for the first time since October.

China’s Loan Prime Rate — its new monthly rate — will be announced on Thursday and is likely to see a small reduction as authorities there seek to keep plenty of cheap money flowing to businesses and consumers struggling amid the virus shut downs.

What Bloomberg’s Economists Say

“The focus will be on China for answers critical to the region and beyond — how the battle to contain the coronavirus is progressing, how much of the economy has managed to get going again after extended shutdowns, and how is policy shifting. We expect cuts to loan prime rates, and will be on the lookout for other measures aimed at shoring up growth.”

Europe, Middle East and Africa

The week sees the UK release data on inflation and retail sales in January, which investors will scour for signs of any “Boris bounce” following the prime minister’s decisive election win. That will be followed Friday with February purchasing managers’ indexes that will show whether the increase last month — which helped stave off a Bank of England rate increase — has been sustained.

In Europe, similar gauges will show if the coronavirus is having any initial impact on the region’s economy, while investor mood about Germany will be on display in the ZEW index. The European Central Bank publishes the record of its January policy meeting, and there are speeches from Vice President Luis de Guindos and Chief Economist Philip Lane.

In Turkey, analysts expect Central Bank Governor Murat Uysal to continue his rate-slashing spree on Wednesday, moving a step closer to the single-digit borrowing cost demanded by President Recep Tayyip Erdogan. That’s even as aggressive monetary easing has brought Turkish interest rates below inflation.

After starting the week with the Presidents’ Day holiday Monday, the US is in for a relatively light run of economic data, with housing starts and PMI data among the more important releases. It’s a slightly busier slate for the Fed, with minutes of its January meeting due on Wednesday, and more than half a dozen board members due to make speeches.