Coronavirus is casting a long shadow over economic forecasts for the year ahead, with the enormous uncertainty around the full extent of the pandemic forcing economists to hedge their bets.
It may yet force the Reserve Bank to make further cuts to interest rates, although they are likely to take a wait-and-see approach at their OCR announcement next month.
Westpac chief economist Dominick Stephens says it looks likely that the outbreak will have some impact on New Zealand's GDP but it is too early to say whether it will be significant beyond specific sectors like tourism and fresh food exports.
"The economy is a big place," he says. "But I don't want to be too Pollyanna-ish because the range of uncertainty is so huge."
His team has done estimates of the impact to the tourism sector which suggest Chinese visitor numbers could fall by 40 per cent this quarter and total visitor numbers by five per cent for the quarter.
That would potentially put a dent in total GDP figures for the quarter.
But his team had looked back at the impact of the Sars virus in 2003 and the H1N1 Swine Flu in 2009, similar flu panics had not translated to material impacts.
"There was a big panic about Sars and it blew over very quickly and had a limited impact on NZ," Stephens said.
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At the time it was estimated the Sars virus would knock 0.1 to 0.2 per cent off New Zealand's GDP
"But after the event it was probably indistinguishable to the general vagaries of the data. It wasn't noticeable."
The Swine Flu epidemic of 2009 was similar, with a negligible macro-economic impact.
There were some serious differences between then and now though, he said.
"Back then , 5 per cent of our exports went to China. Now 28 per cent goes to China and 48 per cent got to Asia not including Japan.
Trade figures from Statistics New Zealand, released yesterday, showed exports to China hit records, with beef exports exceeding those to the US for the first time.
Service exports like tourism and education were certainly more important to the overall economy now than they were in 2003, he said.
And those sectors appeared to be more vulnerable to fall-out from outbreak than other exports.
"It could well be limited to specific sectors but one day one of these viruses is going to turn out to be really severe and we don't know whether this is the one."
Based on the greater links to China, UBS economist Robin Clements has downgraded his outlook for New Zealand's first quarter GDP growth from 0.5 per cent( q/q) to 0.4 per cent.
"We are forecasting growth to average 2.1 per cent in 2020, just below the consensus forecast of 2.2 per cent and further below the RBNZ's November projection of 2.5 per cent," he said.
Data for the last quarter of 2019 is still flowing through - unemployment is due next week - but feels increasingly irrelevant to the broader economic narrative.
In theory both the local and global economy were expected to improve this year following the progress in the US China trade war.
But with the timing of the outbreak coinciding with Chinese New Year it undercuts an annual spike in consumer spending - something comparable to New Zealand's Christmas retail bump.
China's economic growth will be under pressure - for the first quarter of this year at least.
Currency traders understand New Zealand's close relationship to the Chinese economy and the Kiwi dollar has also fallen sharply since the outbreak began.
It is now off more than two and half cents against the US dollar since the start of the year, at US64.9c this afternoon.
However, the fluidity of our currency has traditionally provided a valuable hedge for exporters who get a boost from the lower Kiwi, which offsets any fall in international export price.
The uncertain outlook also puts the Reserve Bank in a difficult position going in to its first interest-rate call for 2020 - due on Wednesday, February 12.
Stephens said he would expect to see the RBNZ stick with its pre-existing forecasts and treat coronavirus risk as a standalone topic.
"The best strategy for the Reserve Bank would be to take a wait-and-see approach," he said.
"I don't think it would be wise to base its forecasts on a severe coronavirus. It would be better to say: we've done our work, here's our analysis absent a coronavirus impact.
"If the risk materialises, we'll throw those forecasts out and cut the OCR ... no one's going to blow them up for that."
There was still potential for a strong rebound if the outbreak proved short lived, he said.
"If we're right about our tourism impact estimates it will show up in the GDP figure. But then you do get a rebound. People who cancel flights do rebook later."