Coronavirus Impact on Global Economy
By:Shoaib Habib Memon
The fast-spreading new coronavirus that originated in the Chinese city of Wuhan is, at its most immediate level, a public health crisis. But it is also much more than that. As governments struggle to contain the epidemic, the virus is already having economic ramifications in China and around the world.
While it remains unclear how far the virus will spread because Viruses don’t see borders and when it will peak, economists are already trying to estimate the impact on gross domestic product (GDP) in the world’s second-largest economy and beyond.Chinese authorities put the death toll at 361, with 17,302 confirmed cases. Experts predict more than 100,000 could become infected worldwide, however, with the virus having already spread to 26 countries, including other major population centers in Asia such as India.
With schools and factories shut in China, air travel curtailed, and major cities resembling ghost towns, the economic effects of the world’s worst health crisis in decades are becoming more damaging by the day.
Australia joined the United States and Singapore in blocking entry to noncitizens traveling from China, with more than 60 nations imposing entry restrictions on Chinese nationals.
Financial markets have also felt the effect of the health crisis.The cronovirus outbreak already having a damaging economic and business impact, affecting everything from tourism to the supply of parts to the automotive and technology industries.
Stock markets around the world are lower than they were two weeks ago. China’s market fell 8% on the first day of trading after the holiday.
There has been a particularly marked impact on the prices of industrial commodities, as China is such an important buyer.
Crude oil hit its lowest level in more than a year.
It has dropped by about 15% in the past two weeks, reflecting declining demand from China – underlined by reports the country’s leading refiner, Sinopec, is cutting back.
A group of oil exporting nations is considering production cuts in an effort to reverse the price fall.
Copper is also cheaper – by about 13% over the past two weeks.
It is an important material for the construction industry, which is also sure to be affected in China.
Airbus has stopped its production line in Tianjin as travel restrictions imposed by Beijing take their toll.GSK, one of Britain’s largest drugmakers, said its medicine packaging facility in Tianjin, which employs about 100 people, remained closed.Apple, which has suppliers in Wuhan, said the reopening of some suppliers’ factories had been postponed from the end of January to mid-February. Ikea has closed all of its 30 stores in China, while McDonalds shut about 300 Resturaent , 10% of its network in the country, and Starbucks has shut about half of its 4,100 cafes.The London-listed InterContinental Hotels has 443 outlets in China and has waived cancellation fees for a period, adding to the impact from a drop-off in domestic and inbound travel.