(Bloomberg) -- President Moon Jae-in said the spreading coronavirus is an emergency for South Korea’s economy and called for “extraordinary” steps to minimize its impact.

“An emergency situation warrants an emergency prescription,” Moon told his Cabinet on Tuesday, warning that the virus’s impact could be bigger and longer-lasting than a 2015 epidemic that killed 38 people in South Korea and hit growth. Back then, the central bank responded with a rate cut and the government enacted a 11.6 trillion won ($9.8 billion) extra budget.

Moon’s comments came after Bank of Korea Governor Lee Ju-yeol and Finance Minister Hong Nam-ki met last week to discuss responses to the crisis amid growing speculation the BOK could cut rates at next week’s meeting.

Moon offered no specifics on measures he’s considering to protect the economy, only saying that “every kind of step that can be taken by the government” needs to be taken.

So far, there have been no deaths in South Korea from the virus, but at least 30 people have been infected and the fallout is threatening to derail the economy’s recovery by slamming supply chains and cutting shipments to China, the country’s biggest export market.

Finance Minister Hong said last week that the government was considering a package of measures to boost exports and domestic consumption in response to the outbreak.

Should South Korea decide to draw up an extra budget, it could set aside as much as 15 trillion won, roughly 0.7% of its gross domestic output, Moon Hong-cheol, an analyst at DB Financial Investment, wrote in a report earlier Tuesday. In 2015, during the Middle East Respiratory Syndrome crisis, extra money was used to build infrastructure and support small businesses.

Still, economist Oh Suk-tae at SG Securities in Seoul said he was skeptical the government would follow through with any sizable spending this time, partly because efforts to pass an extra budget would likely be met with fierce opposition before April’s parliamentary elections.

“It’s too early to shift the entire macro policy over the virus outbreak, but we may see some micro steps to tide the economy over,” he said.

BOK Governor Lee last week tamped down speculation over a possible rate cut, saying it was premature to say whether further action would be needed. After two cuts last year, interest rates match a record low. A further reduction could exacerbate home price bubbles, which has become a political issue.

To contact the reporter on this story: Sam Kim in Seoul at skim609@bloomberg.net

To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Jason Clenfield, Paul Jackson

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