The number of new coronavirus infections in mainland China fell below 2,000 on Tuesday for the first time since January, although global experts warn it is still too early to say the outbreak is being contained.

The economic fallout from the epidemic spread to U.S. technology titan Apple, which warned of iPhone shortages and lower than expected revenue, while South Korea’s president called the situation in his country an economic emergency.

Tough restrictions on travel and movement have helped to limit the spread of the virus outside the epicenter in Hubei province, but at great cost to the Chinese economy and global business.

Apple Inc becomes the latest company to flag lower revenue as a result of the epidemic, saying it would not meet its guidance for the March quarter because of slower iPhone production and weaker demand in China.

The U.S. technology company’s manufacturing facilities in China had begun to reopen but they were ramping up more slowly than expected, and the resulting iPhone shortages would hit sales, it said in a statement to investors.

“The health and well-being of every person who helps make these products possible is our paramount priority,” Apple Chief Executive Tim Cook said in a statement released by Apple.

China is the world’s biggest market for smartphones and some analysts have estimated that the virus may slash demand for handsets by half in the first quarter in China.

Analysts at Nomura again downgraded their China first-quarter economic growth forecast, to 3%, half the pace in the fourth quarter, and said there was a risk it could be even weaker.

“Too much damage has already been done and initial policy stimulus will not be very effective,” they said in a note on Monday. “China is experiencing the rare case of simultaneous demand and supply shocks.”

South Korea President Moon Jae-in declared an economic emergency on Tuesday and promised measures to stimulate demand and shield businesses from the impact of the coronavirus outbreak.

Hong Kong increased government handouts to businesses and the Hospital Authority to HK$28 billion ($3.6 billion) from HK$25 billion pledged previously, to ease the impact on the Chinese-ruled city’s battered economy.

The moves came after economic data released in Japan, the world’s third-largest economy, and regional finance and travel hub Singapore, pointed to possible recession in the coming quarter.

China’s state assets regulator said the impact of the coronavirus outbreak on industries would mainly appear in February, suggesting the worst may still be to come in terms of business activity.

Source:- Reuters