World finance officials to consider how to cushion economies against coronavirus

G7 finance officials will on Tuesday discuss ways to bolster their economies against the impact of the spreading coronavirus outbreak, but are not expected to specifically call for new spending or coordinated interest rate cuts, a G7 official said.
Finance ministers and central bank governors from the group will hold a conference call at 1200 GMT to discuss the outbreak. But according to the official, who declined to be identified, a statement they are crafting does not detail any fiscal or monetary steps
Global stocks and oil prices have made some recovery afters policymakers indicated willingness to help ease the economic fallout from the coronavirus, while worries about the outcome of the Group of Seven heads’ discussion kept a lid on gains.
“This is a tug of war between hope and fear. Central banks are giving hopes with their potential stimulus,” said Vasu Menon, senior investment strategist at OCBC Bank Wealth Management.
“The question is what they will do? Monetary policy is already very loose and interest rates are very low,” he said.
Global stocks suffered a rout last week on growing fears that the disruption to supply chains, factory output and global travel caused by the epidemic could deal a serious blow to a world economy trying to recover from the U.S.-China trade war.
The G7 official, who has direct knowledge of the deliberations, told Reuters the officials would pledge to work together to mitigate the damage to their economies from the fast-spreading epidemic.
The language of an expected statement was subject to change as it was under discussion, the official said.
The coronavirus, which emerged in the central Chinese city of Wuhan late last year, has spread rapidly around the world over the past week, with more new cases now appearing outside China than within.
There are more than 90,000 cases globally, with more than 80,000 of them in China, and infections appearing in 77 other countries and territories, with Ukraine the latest country to report its first case.
China’s death toll is at 2,943 with more than 75 deaths elsewhere.
New cases in China have been falling sharply, with 125 reported on Tuesday, thanks to its aggressive measures to stop the spread of the disease.
After what critics said was an initially hesitant response to the virus, China imposed sweeping restrictions, including suspensions of transport, sealing off communities affecting tens of millions of people, and extending a Lunar New Year holiday across the country.