CANBERRA (BLOOMBERG) – Prime Minister Scott Morrison said the coronavirus outbreak could hit Australia’s economy harder than the global financial crisis, as he prepared to unveil a multi-billion-dollar stimulus package to cushion the blow.

“The epicentre of this crisis is much closer to home,” Morrison said in a speech in Sydney on Tuesday (March 10), referring to Australia’s biggest trading partner, China. “The consequences for other countries are just as significant, given the integral role China plays as a source of final demand for goods and services and as part of the global supply chain.”

The conservative government is finalising a fiscal injection to support firms struggling with cash flow and protect jobs, as the outbreak hits an economy already suffering from a prolonged drought and a devastating summer of wildfires. In a report on Monday, Bloomberg Economics’s James McIntyre said the nation will record its first recession since 1991.

Morrison has effectively given up his long-held goal of returning the federal budget to surplus this fiscal year as Australia joins governments around the world in opening up the fiscal spigots. More than US$54 billion ($74.8 billion) in budget support has already been pledged or is under consideration worldwide, with governments adopting a mix of cash handouts, tax breaks and transfers.

“We resisted repeated calls for cash splurges as part of our unwavering plan to rebuild our fiscal buffers so we could respond when it is truly needed,” Morrison said. “And that time is now. This is what we have been preparing for.”

Morrison didn’t give details of the stimulus package, which is expected to be signed off by his Cabinet later on Tuesday. The measures would be proportionate and temporary and could be ramped up depending on length and severity of the economic impact, he said.

Markets have been exceptionally volatile. The Australian dollar plunged almost 5 per cent in less than 20 minutes on Monday, the biggest one-day decline since 2008, and Australia’s benchmark S&P/ASX 200 stock index slumped 7.3 per cent.

While Australia has only reported 80 confirmed cases of the virus and three deaths, its economy is particularly exposed to China.

The Treasury and Reserve Bank of Australia estimate the impact on tourism and education from China’s shutdown and other virus fallout will cut 0.5 percentage point from GDP in the first quarter. That doesn’t include supply chain disruptions and is in addition to a 0.2 point cut from the wildfires.

Gross domestic product will fall 0.4 percentage point in the first three months of the year and 0.3 percentage point in the second quarter, according to Bloomberg Economics. Bill Evans, chief economist at Westpac Banking Corp, revised his economic growth forecasts on Monday and predicts contractions in the first and second quarters of 0.3 per cent respectively, before a sharp rebound in the second half.

“It’s a disruptor,” Morrison said of the virus. “But it’s a health disruptor, not a financial disruptor, in terms of its cause. And so it’s important to keep it in perspective. This has a fixed life, this virus. It will run its course, and it’s important we do things while we address this that does not impede our longer-term position.”