Coronavirus and its global economic impact

Swapan Kumar Saha

Coronavirus has spread to all the countries across the globe since it originated in China on December 8th, 2019. Approximately 2.5 million people have been infected because of this virus and around 1,63,000 deaths had been reported till   today.

Coronavirus belongs to a family of virus which cause disease in animals.

This virus had jumped to humans and it does cause cold like symptoms. However, this virus spread is very dangerous and now its scalability has spread across the globe and almost all of the countries report of individuals having been infected from this virus. 80% of all the cases lead to mild infection. Till now, 20% of Covid-19 cases were classified as ‘severe’ whereas death rate varies from 0.7%-3.4% of all infected patients.

The main source of corona virus is from wet market of “Wuhan” where both dead and alive animals were sold out. There is no certainty about the original animal source of Covid-19 but it is widely agreed that the original host is bat. Bats were not sold in Wuhan market but it is thought that they had infected numerous animals sold there. 

This virus had affected the population in Europe, Asia, North America, South America and African countries. However, World Health Organization (WHO) is concerned about the ability of poorer countries in the world to fight against this pandemic.

Economical Perspective:

Looking at economic perspective as this corona virus is adversely impacting economy of countries across the globe. This virus brings about third and greatest economic shock of 21st century after 9/11 and Financial crisis of 2008. Official data reveals that economy has slowed down in  China and the virus had caused 20% GDP decline in first two months of 2020. 

During the month of March, Chinese services and manufacturing sectors had depressed to record low and its automobile sales had depressed by 80% whereas exports had reduced by 17% in January and February on cumulative basis. In March, US stock market took only 15 days to plunge in bearish territory which is 20% depression from its peak. 

Major financial firms such as Morgan Stanley, Goldman Sachs and JP Morgan had experienced contraction in US GDP by nominal rate of 6% on annual basis in first quarter and between 24%-30% in second quarter.

US treasury secretary has also informed that redundancy rate would increase over 20% which is almost at 2 folds to what experienced in 2008- Financial debt crisis. Despite of emergency actions being taken by European Central Bank and US federal reserve bank; international financial markets had fluctuated wildly. 

Standard and poor credit rating agency (S&P) 500 Index had experienced the worst week since 2008 and there was depression of indices by 15% in week ending 20th March 2020. Japan and Europe have experienced depression in fourth quarter performance and they are already in recession period.

Organization for economic cooperation and development (OECD) had also projected that corona pandemic depress global GDP growth from 2.9% to 2.4% in 2020. Not only this, International Air Transport Association (IATA) had also warned that air carriers will suffer between $63bn and $113 bn in proceeds in 2020. Corona pandemic had its adverse economic impact on sporting events, 2 restaurants as well as hotel and hospitality industry.

Not only this, global film industries are also experiencing the loss of $5 billion in box office revenue. Along with that, there are different impacts which Corona outbreak is creating to society across the globe. One of the outcomes because of this corona outbreak was that there is decrease in polarization. 

Big segment of population became more deeply inclined towards the religion. Along with that, it also acts as test run for bigger economies to improve their health infrastructure so that they can be able to deal with such pandemic in future. Along with that, people are transforming their businesses from brick and mortar model to online and ecommerce businesses.

Swapan Kumar Saha is a senior journalist