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COVID-19

Economic Effects of the Coronavirus (COVID-19)

The economic effects of the COVID-19 coronavirus around the world according to the World Economic Forum.

As China grapples with the coronavirus, the economic damage is mounting around the world.

There are around 70,000 confirmed cases of COVID-19, the new coronavirus that emerged in Wuhan, China, in December and is spreading around the world.

Businesses are dealing with lost revenue and disrupted supply chains due to China’s factory shutdowns, tens of millions of people remaining in lockdown in dozens of cities and other countries extending travel restrictions.

  • China’s economic growth expected to slow to 4.5% in the first quarter of 2020  due to COVID-19– the slowest pace since the financial crisis, according to a Reuters poll of economists.China is the world’s second-largest economy and leading trading nation, so economic fallout from coronavirus also threatens global growth.
  • “Global oil demand has been hit hard by the novel coronavirus,” says the International Energy Agency.China is the world’s biggest oil importer. With coronavirus hitting manufacturing and travel, the International Energy Agency (IEA) has predicted the first drop in global oil demand in a decade.
  • Factory shutdowns are slowing the flow of products and parts from China,due to COVID-19 affecting companies around the world, including Apple and Nissan.The shortage of products and parts from China is affecting companies around the world, as factories delayed opening after the Lunar New Year and workers stayed home to help reduce the spread of the virus.
  • Many trade shows and sporting events in China and across Asia have been cancelled or postponed.
  • The pharmaceutical industry is also bracing for disruption to global production due to COVID-19.Today, about 80% of pharmaceuticals sold in the U.S. are produced in China. This number, while concerning, hides an even greater problem: China is the largest and sometimes only global supplier for the active ingredient of some vital medications. The active ingredients for medicines that treat breast cancer and lung cancer and the antibiotic Vancomycin, which is a last resort antibiotic for some types of antimicrobial resistant infections, are made almost exclusively in China.
  • China is not only the dominant global supplier of pharmaceuticals, but it is also the largest supplier of medical devices in the U.S. These include things like MRI equipment, surgical gowns, and equipment that measures oxygen levels in the blood
  • The travel and tourism industries were hit early on by economic disruption from the outbreak.
  • Global airline revenues are expected to fall by $4-5 billion in the first quarter of 2020 as a result of flight cancellations
  • The impact of the deadly virus will be felt on global steel industry for at least two to three years.At present, India is the second-largest steel producer with an annual output of over 106 million tonne (MT) but lags China that accounted for 928.3 MT of the alloy in 2018.Therefore, the government is Asking domestic steel makers to step up production in the aftermath of coronavirus outbreak.
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