Coronavirus; What will happen to the global economy in very upcoming days?

World Health Organization (WHO) has declared coronavirus or Covid-19 pandemic worldwide. The virus, which was originated from Wuhan of China's Hubei province in November last year,  has become a worldwide fear. The outbreak has now spread to Italy, South Korea, Iran, the United States and many more countries. Different countries are taking measures to prevent the pandemic.
coronavirus : clear threat to global
economy
Travel is being banned as a quarantine-related move. Thousands of international flights have been cancelled  worldwide. The virus hasn't not only caused havoc to the health sector but also to food safety. Meanwhile, the stock and oil markets of different countries have collapsed. At the end of the year, how much the rate of growth of the economy will decrease, the calculation has already begun. All in all, the world faces huge financial losses. Bloomberg economists have made a prediction by analyzing the effect of corona in four stages. Although the nature of coronavirus is still unknown to humans. At the same time, it is not possible to reach the final conclusion by looking at the actions and business responses of the governments of different countries. But through these four stages analysis, it can be predicted,  what the world is going to face.

Analysts say, first we need to understand what is happening in China. In the last three to four months, the country's automobile industry has witnessed a collapse. Sales of cars have dropped by about 80 percent. The statistics that are being released, indicate the lowest position of the industry ever. Economic activity has virtually ceased. Bloomberg economists expect China's GDP growth rate will decline by 1 to 2 percent this year, which is a record. If China does not turn around this March, the situation could worsen. Economists have analyzed these four steps with that idea in mind.

1. The big push of China will spread to the world
First of all, let's assume, China will fight back as soon as possible. Then, where the world will stand at the end of the year. Let's say, all the Chinese factories have opened in March, and people have joined to their works. To the world, China is the source of demand, the source of supply. China is known to all as 'World factory'. China imports $ 2.4 trillion dollars every year. China is the main buyer of countless multinational companies, from latte of Starbucks to Fried Chicken of Yams. It is completely needless to say that the amount of damage will be huge when these Chinese people will be 'house arrest'.
Coronavirus impact on economy of China
The tourism sector of all the countries of the world is facing more and less effect of coronavirus. Many factories in China have closed due to coronavirus. From Apple's iPhone to construction machinery, all products have been disrupted. However, it is not just the big-name companies that are being harmed, the small factories will be affected also.


Now let's assume that China is able to control the disaster quickly. China will be alive again in the second quarter of the year. This will create an impact on the rest of the world economies as well. This way, the loss of the first half will be possible to recover, somehow, in the second half. As a result, the impact of the world at the end of the year will not be as visible.

2. The outbreak will hinder every single country
Now the question is, what if the outbreak increases? In the second scenario, Bloomberg economists assume China will take much more time to recover. Recovery will directly form in 'U' Shape rather than in 'V' Shape. That means the progression will be sluggish. Li Lei, manager of Made in China.com, said that if all factories return to production, not all problems will be solved immediately. Many factories will not have enough logistics. And they have barriers to supply chain productivity also. In addition to China, the outbreak has been reported in South Korea, Italy, Japan, France and Germany. At the end of the year, global growth is expected to fall to 2 to 3 percent, which was previously expected to be 3 to 1 percent.
Fall down of GDP of Eurozone due to corona effect (Forecast)

3. If the outbreak continues ...
If the situation gets worse than the prediction, that will be a matter of diagnosis. The outbreak has already spread widely in South Korea, Italy, Japan, France and Germany. In the meantime, countries that confirmed the coronavirus in early March are also in great corona risk. These countries are the United States, the United Kingdom, India, Canada. This means that the world's 8 largest economies fight the slowing down of virus control. In such a case, world growth could be stagnant to 1 to 2 percent. The economic slowdown will begin in the Eurozone and Japan. The US growth will decrease to 0.5 percent. During the election year, the country will suffer huge unemployment.

4.The global epidemic
  Considering the economic impact of the global epidemic, we assume that the entire country will face a severe setback in this situation.In this case, the global economic growth rate will be  almost zero per cent this year. Economies like the US, the Eurozone and Japan have shrunk. China's economic growth rate will be only three and a half per cent, which is the lowest growth rate after 1980. In fact, the situation is moving towards its last state, it is quite easy to perceive.

The loss of the airline's industry

Coronavirus or Covid-19 is affecting all aspects of the economy. The manufacturing sector is facing the biggest crisis as well as the supply chain system. The airline or the aviation industry has come down to the ground in fear of the virus. Because of the coronavirus, countless people around the world have postponed travel. The tourism sector is in great danger. Many airlines are no longer flying in the sky as people are reducing tours significantly. Most people are kind of stuck at home and others are not going out without special reason.

How is Coronavirus spreading fast? Aviation is playing a major role in this regard. Because of this, many countries are not operating flights to China. As a result, small economies around a large country like China, are in crisis. In the meantime, Hong Kong and Taiwan are the most affected economies. Again, the condition of a large economy, like Japan and South Korea, in the same region, is not good at all.  70 to 75 per cent of their flights are closed. Among other countries, Canada has suspended near about 58 per cent of its flights and 67 per cent of Russia. So the calculation is really horrible.

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