This is the second part of the Corona Virus And Its Impact On Global Economy. If you wish to read the first part, you should click here.
A lot has changed since last month in terms of the Coronavirus pandemic. Cases of COVID19 (Novel Coronavirus) are continuously rising. There are around 175,982 confirmed cases and 6716 deaths so far. This has led to travel bans all over the world. Countries are on a lockdown both from the outside world and within. Trade, business, and commerce have been severely affected. A global economic slowdown is now a real thing. In this article, we bring you a compilation of facts and news so that you get a 360° view of the whole situation.
Coronavirus (CoV) is a part of a family of viruses. The virus can cause anything from the common cold to diseases like Severe Acute Respiratory Syndrome (SARS-CoV) and Middle East Respiratory Syndrome (MERS-CoV). CoVID19 is a novel coronavirus that has originated from Wuhan District, China. On 11 February 2020, the WHO named the disease CoVID19 – Coronavirus Disease. So, CoV is a type of virus and CoVID19 is the disease, just like HIV is a virus, AIDS is the name of the disease. To know more about the disease read here.
Canada, US, Brazil, Argentina, Australia, Indonesia, Malaysia, Thailand, Philippines, South Korea, Japan, Mainland China, Iran, Iraq, Chile, Oman, Egypt and most of Europe (Italy being the hotbed) have been marked red (has more than 100 cases) by WHO. Recently Pakistan and India have also been added to the list. The virus is not just affecting people's health but the country's economy too. To know more about the affected countries read here.
The UNCTAD report has been launched. Here are the following highlights of the report:
- The UN's trade and development agency says the slowdown in the global economy caused due to coronavirus outbreak is likely to cost at least $1 trillion.
- UNCTAD says the fall in oil prices has been also a contributing factor to the "growing sense of unease and panic".
- The report compares the current situation with the “doomsday scenario” in 2008-2009 when the world economy grew by only 0.5 percent.
- The report suggests the government of the nations to spend more at this point in time to prevent a meltdown.
- Europe was already predicted to have a recession because of stagnancy in the German economy. The problems with the Italian economy (because of the coronavirus outbreak) will just hasten the process.
These are just highlights, to get the details of the report, click here.
The CoVID19 outbreak is a human tragedy and will also have a growing impact on the global economy. Therefore McKinsey has come up with an article intended to provide business leaders with a perspective on the evolving situation and implications for their companies. Out of many other things in the article, there are three main predictions that have been made by McKinsey in case of prolonged contraction. They are:
- Quick Recovery: The virus’s high transmittionablity and rising cases have caused a strong public reaction. But this may not necessarily be a bad thing. Government measures, healthcare reception and public acceptance to the same has been able to control and contain the virus to a certain level in countries like China and South Korea.
- Global Slowdown: The prolonged threat of the disease has shown a change in the public’s daily behavior all over the world, thus resulting in demand stock cuts. The supply chain, the consumer goods sector, and the manufacturing sector are already in a pickle. The service sector is in a worse situation. Many companies are expecting bankruptcies. The chain has already started in the UK with the closedown of FlyBe. All of this is leading to a global slowdown.
- Pandemic and recession: This scenario is similar to the global slowdown, except if the virus is not seasonal (as assumed) the cases will continue to grow in the 2nd and 3rd quarter, overwhelming healthcare systems. Pushing back the recovery in consumer confidence to quarter 3rd or beyond. All this will lead to recession, with global growth in 2020 falling to 1.5% or less.
In case, you want to know more about the McKinsey Predictions click here.
Electronics, hospitality and tourism, restaurant and entertainment, insurance, pharmaceuticals, and construction are all severely affected by the virus. To know more about the damage these industries are facing click here.
Fears of the impact of coronavirus on the global economy have made markets uneasy worldwide, plunging stock prices and bond yields. Here are six charts that show the impact the outbreak has had on the global economy and markets so far. Find the link to the article here.
Finance ministers, central bankers of advanced economies including the World Bank and the International Monetary fund, monetary policymakers of Europe and Japan are coming together to find solutions to the impending damage due to coronavirus. They have also pledged to act as needed to control any kind of economic fallout due to the spread of infections. To know more about the plans of these economic policymakers, click here.
Following are the highlights:
- The Indian economy is forecasted to grow at 5% in current fiscal, the slowest in 11 years.
- In India, the immediate victim is the aviation sector. Up to 75% drop in international bookings and a 20% drop in domestic bookings have been noticed.
- India’s exports are also negatively affected by the lockdown with some of India’s leading trading partners like China, Italy, and Germany.
- Job losses mainly in labor-intensive sectors such as gems and jewelry, handicrafts and carpets are already happening because of state-wise lockdowns.
- “India is relatively insulated from the global value chain and to that extent impact on India will be less, but India is integrated into the global economy, so there will be some impact," says Reserve Bank of India governor Shaktikanta Das.
Want to have a detailed overview? Click here.
Even the most effective containment strategies can only slow the spread of the Covid-19 disease. Since the World Health Organization has declared CoVID19 as a global pandemic, all eyes have turned to the prospect of a vaccine, because only vaccines can prevent people from getting sick. About 35 companies and academic institutions are racing to create such a vaccine, at least four of which already have some formula or solution. These companies have already begun testing on animals. So how quickly can we have a vaccine? Read this article to know more.
“We all feel so helpless. This is an amazing opportunity for me to do something,” said Jennifer Haller, 43, housewife and mother of two of Seattle, who volunteered as the first test subject. To know more about the story read it here.
A medicine for influenza developed and produced by Fujifilm Holdings Group company is apparently effective against the new coronavirus, said the Chinese government. Beijing has already begun recommending the drug favipiravir, developed by Fujifilm Toyama Chemical and sold under the brand name Avigan. Clinical trials were conducted on 200 patients at hospitals in Wuhan and Shenzhen. Results showed that patients who received the drug tested negative in a comparatively short time, while pneumonia symptoms were markedly reduced. So, what is this miracle medicine? Can it really cure CoVID 19? Find out more info here.
PM Narendra Modi addressed India on 19th March at 8:00 PM. Here are the key highlights of the whole speech -
- From 22nd March onwards, PM Modi appeals to the nation to observe "Janta Curfew". In the speech, he urges Indian citizens to stay at home from 7:00 AM to 9:00 PM.
- He asked the citizens to maintain social distancing.
- The prime minister also said that a task force will be constituted under the Finance Minister to look and ensure all steps are taken to reduce economic difficulties. The task force will make timely interventions for all economic sections of the society.
- On 22nd March at 5:00 PM, Modi has requested citizens to cheer and celebrate the work of "Corona Warriors" (i.e government employees, doctors, nurses, taxi, bus, auto drivers, etc who are servicing people despite the CoVID19 scare) by clapping hands or any other means.
- PM also asked citizens to not cut "pay" for domestic helpers, drivers, and other people from the unorganized sector in case they are not able to report for work during the curfew.
Highlights of the speech on 25th March -
- India is under lockdown from midnight (March 25). There will be a complete ban on people stepping outside their homes, as per PM Modi's speech.
- PM Modi said the decision will have economic ramifications, but saving people's lives is also important. He stated, "If we don't handle these 21 days well then our country, your family, will go 21 years backward".
- Anyone breaking the new rules will face up to two years in prison and heavy fines.
- PM Modi announced Rs 15,000 crore stimulus to fight COVID-19, to strengthen the healthcare infrastructure of the country. This includes testing facilities related to coronavirus, personal protective equipment, isolation beds, ICU beds, and ventilators.
- PM Modi also appealed to citizens to avoid believing in fake news or rumors. He also advised people not to take medicines without consulting doctors.