As of writing this article, coronavirus has affected more than 400,000 humans around the world, with death count reaching 19,000 mark. On the other hand, more than 100,000 people have been recovered as well. The credit for this recovery goes to tirelessly working doctors, nurses, healthcare and sanitary workers around the globe. On 11th March 2020, the World Health Organization (WHO) announced that the Coronavirus can be characterized as a pandemic. The outbreak of the coronavirus has severely hit the business world and left many industries around the world counting their costs.
The exact source of origin of this pandemic is still unknown. I know a lot of media channels and websites have claimed that the virus is originated from the bat. Well, let me tell you guys there is a vast difference between the information that comes to the surface and the actual information. We’ll put this topic for some other time.
This article notes down the impacts of Coronavirus or COVID-19 on the economies of some key regions and gives a brief about the world.
According to recently published reports, Hubei province in China is said to be the source of the novel coronavirus. China is the first and one of the most severely hit countries in the world. Total cases and deaths due to COVID-19 in the country are reported to be around 81,000 and 3,200 respectively.
2020 is the final year of China’s ambitious 13th Five Year Plan period and it holds particular economic and industrial targets to meet. It remains to be seen if China takes some steps towards major policy adjustments. According to the World Economic Forum (WEF), annual GDP growth is anticipated to slow down to between 5 and 5.5% for 2020.
The system in China has proven its capacity during the outbreak. The private sector has contributed significantly and proved the necessity and potential of the public-private partnership. Tang Ning, stressed that such a crisis can be converted into opportunities with the right mindset. These trying time is shaping many businesses and the entrepreneurship of the private sector to be driven by social good instead of only profits.
After a string of deaths, some heart-stopping plunges in the stock market, and an emergency rate cut by the Federal Reserve, there is a purpose to be alarmed about the ultimate economic impact of the coronavirus in the United States. Advanced economies like the U.S. are hardly immune to these effects. On the contrary, a broad outbreak of the disease in them could be even worse for their economies than in China. Consider travel. According to a publication, the average American takes three flights a year, whereas the average Chinese person takes less than half a flight. The cruise ship stigma alone potentially affects about 3.5% of the USA, which has about 11.5 million passengers each year, compared with only 0.17% of China, which has about 2.3 million passengers.
And if 60 million Americans stop spending $19 billion a year on gyms, which would be a much a bigger deal than if the 6.6 million gym members in China stopped spending the $6 billion they devote to gyms now. But overall, the U.S. is substantially more reliant on services than China is. And, on the flip side, agriculture, a sector not noted for day-to-day social interaction and so potentially less harmed by social withdrawal, is a 10 times larger share of China’s economy than it is in the U.S.
European Union (EU)
European Union (EU), ‘Indefinite Pessimistic’ as termed by Peter Thiel, has sternly been hit by this pandemic. The EU and the Eurozone are both expected to fall into recession this year due to the outbreak. Thierry Breton, the Industry commissioner, projected that the negative impact could be 2-2.5 percent.
Europe needs the ‘whatever-it-takes’ approach in the coronavirus response. Eurozone finance ministers at a videoconference tasked the bloc’s bailout fund, the European Stability Mechanism (ESM), worth €410bn set up after the 2008-09 financial crisis, to consider ways of tackling the economic fallout of the outbreak.
The world is experiencing a sudden and unexpected halt in the work-life of a human being. The outbreak brought horrible human sufferings in China, and other parts of the world, along with substantial economic costs. China’s slowdown in the first quarter of 2020 will leave a deep mark for the rest of the year.
The world economy has already gone back a few years and may continue to do so if this pandemic is not stopped. What started as a series of sudden stops in economic activity, quickly cascaded through the economy and morphed into a full-blown shock simultaneously impeding supply and demand—as visible in the very weak January-February readings of industrial production and retail sales. Alleviating the impact of this stark shockwave demands providing support to the most vulnerable. Many governments have already announced several relief packages targeting the most exposed households and looked for new ways to reach smaller firms- for example, by waiving utility bills, supplying grocery stuff at lower prices, etc. To end this pandemic, I think the whole world needs to come together and help each other to design better policies and efficient allocation of resources.