The coronavirus outbreak could cost China $103bn and the rest of Asia $22bn, according to the Asian Development Bank (ADB).
The ADB said losses would result through supply chain disruptions, declining domestic demand, production shortfalls and reduced tourism.
In a report, The Economic Impact of the Covid-19 Outbreak on Developing Asia, the ADB said global losses would range from $77bn-$347bn, or 0.1%-0.4% of global gross domestic product (GDP).
In a moderate scenario precautionary behaviours and restrictions on movement will prove effective and lead to travel bans easing three months after the outbreak began in late January.
In a worst-case scenario precautionary behaviour and restrictive policies remain in place for six months and a large decline in both consumption and investment growth causes greater economic harm.
The country to be most affected by the large-scale losses would be China, which would lose $103bn – or 0.8% of its GDP. The rest of developing Asia would lose $22bn, or 0.2% of its GDP.
The ADB suggested that production temporarily fell in China to 50%-60% of normal levels, but was now normalising.
“There are many uncertainties about Covid-19, including its economic impact,” said ADB chief economist Yasuyuki Sawada.
“This requires the use of multiple scenarios to provide a clearer picture of potential losses. We hope this analysis can support governments as they prepare clear and decisive responses to mitigate the human and economic impacts of this outbreak.”
ADB funding to deal with the outbreak has included $2m for China and the Greater Mekong Subregion and $2m to support other developing countries.
It also provided an $18.6m loan to Wuhan-based pharmaceutical distributor Jointown Pharmaceutical to enable the firm to continue to supply essential medicines and personal protective equipment.
Meanwhile, Honda Motor Co plans to temporarily cut back local production due to difficulty in sourcing parts due to outbreak, according to Reuters.
“Honda has slightly adjusted its production plan at the (two) plants in Saitama. The overall impact is limited,” a company spokesman said.
“For certain models, we are swapping originally intended trims to others and adjusting production to other models as needed.”
Cathay Pacific is expecting a “substantial” loss in the first half of this year due to the coronavirus outbreak, the BBC has reported.
The Hong Kong carrier has cut back on number of flights to save costs. However chairman Patrick Healy said the first half of 2020 was expected to be “extremely challenging financially”.
The airline saw a 28% drop in 2019 profits due to fallout from the city's political protests and passenger numbers are now plummeting from the effects of the virus.
Healy told the BBC he expected “our passenger business to be under severe pressure this year and that our cargo business will continue to face headwinds”.
Beijing has now ruled that all travellers from overseas must self-quarantine for 14 days at home or in a hotel, regardless of whether their country of origin.
Previously only arrivals from countries considered to be at high risk were forced to self-quarantine.
☛ Want to stay up to date with the news? Sign up to our daily bulletin.