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Economic Effects of COVID-19 Around the World

As the world grapples with the coronavirus, the economic impact is mounting - with the OECD warning the virus presents the biggest danger to the global economy since the 2008 financial crisis.
UNCTAD, the UN trade agency, warned of a slowdown of global growth to under 2% this year, effectively wiping $1 trillion off the value of the world economy.
Effects of COVID-19 Around the World

A poll of economists by the London School of Economics found 51% believed the world faces a major recession, even if COVID-19 kills no more people than seasonal flu. Only 5% said they did not think it would.
There are now some 170,000 confirmed cases of COVID-19 globally, 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. Weeks after China imposed travel restrictions on million of its people, Italy placed quarantine measures on its entire population, with France and Spain imposing similar measures and many other European countries restricting movement and business activity. On 11 March, some key industries in Wuhan were told they can resume, a day after Chinese President Xi Jinping visited the city for the first time since the outbreak began.
Here are a few ways the outbreak is sending ripples around the world.

Predicted slump

China is the world’s second-largest economy and leading trading nation, so economic fallout from COVID-19 also threatens global growth.
Economists polled by Reuters on March 3-5 said the outbreak likely halved China’s economic growth in the current quarter compared with the previous three months.
The poll of more than 40 economists, based both in and outside mainland China, forecast growth to fall to a median of 3.5% this quarter from 6.0% in the fourth quarter of 2019, a full percentage point lower than predicted in a Feb. 14 poll.
“If you’re in a city which has been basically closed down or put (under) virtual house arrest, you’re not going to go out to the streets, you can’t go to the cinema, the restaurants...with all those sorts of things, economic activity will be substantially negatively affected,” said Rob Carnell, head of Asia-Pacific research at ING.
The Chinese economy is likely to be hit further by reduced global demand for its products due to the effect of the outbreak on economies around the world.
Data released on 16 March showed China's factory production plunged at the sharpest pace in three decades in the first two months of the year - something which could mean an even greater economic slowdown than predicted in that poll.
"Judging by the data, the shock to China's economic activity from the coronavirus epidemic is greater than the (2008) global financial crisis," said Zhang Yi, chief economist at Zhonghai Shengrong Capital Management.
"These data suggest a small contraction in the first-quarter economy is a high probability event. Government policies would need to be focused on preventing large-scale bankruptcies and unemployment."
To combat the economic fallout, the US Federal Reserve on 15 March cut its key interest rate to near zero.
But the move, coordinated with central banks in Japan, Australia and New Zealand in a joint-effort not seen since the 2008 financial crisis, failed to shore up global investor sentiment, with oil prices dipping below $30 a barrel on 16 March, and a renewed stock slump predicted when Wall Street opens.
China is the world’s biggest oil importer. With coronavirus hitting manufacturing and travel, the Internationa Energy Agency (IEA) predicted the first drop in global oil demand in a decade.
"Covid-19 (coronavirus) has spread beyond China and our 2020 base case global oil demand forecast is cut by 1.1 mb/d. For the first time since 2009, demand is expected to fall year-on-year, by 90 kb/d," the IEA said in its monthly report for March 2020.
On 9 March, oil prices lost as much as a third of their value - the biggest daily rout since the 1991 Gulf War, as Saudi Arabia and Russia signaled they would hike output in a market already awash with crude, after their three-year supply pact collapsed.
“A WHO declaration of global emergency and U.S.-EU traffic ban is dampening the global energy demand outlook, in conjunction with an intensified price war between Saudi and Russia,” Margaret Yang, market analyst at CMC Markets in Singapore, told Reuters.
“Bears are dominating the oil market and there might be more downside before a bottom can be reached.”
Anyone hoping cryptocurrencies might prove a safe haven was disappointed. Bitcoin lost more than 30% of its value in the five days to 12 March, Reuters reported, outpacing losses for stocks and oil.
“We’ve seen de-risking across all asset markets,” said Jamie Farquhar, portfolio manager at London-based crypto firm NKB. “Bitcoin is certainly not immune to that."

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49 Comments

  1. It will definitely leave a negative impact on our economy. Thanks for the easy to read info

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  2. Covid has hit the economies and people's jobs really hard. May this pandemic be soon contained.

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  3. Very informative, COVID very bady affected economy.

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  4. The worst i've ever seen since birth , it brings down every business

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  5. Its incredible what this virus has done to the world in all aspects of life. I hope it will be over soon.

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  6. To say this is crazy is an understatement. I just hope every does what they need to do so we can move past this sooner, rather than later.

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  7. This is a crazy time. I can't wait for it to be over.

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  8. Corona affected most of the economy in the world. Terrific, it needs to be over now. Abb bhut hua Corona.

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  9. The only good thing about this is that everyone was affected so its still level playing field. Now if everyone would help each other out, there may be a way for us to get over this.

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  10. If you're going to write such a post as this, you need to include links for evidenc .
    A topic like this is too important not to have verifiable proo . Good post otherwis .

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    1. Alright, I'll include links next time. But it's authentic.

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  11. I fear for economy a lot, I live in Russia so apart of corona effect we are politically unstable and currency is falling super low

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  12. I am really concerned about the economy when this passes. However, I guess its helpful that everyone seems to be affected in some way.

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  13. Covid19 has struck the world and it's economy very badly. The whole world is in quarantine and so the stock market, the economy etc, everything is bound to decline.

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  14. I know it's a tough time for all the nation's but health is more important and all should focus on improving medical conditions...

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  15. There is so much great information here. Thanks for sharing your expertise!

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  16. The effects are going to be so awful. It is sad to see how things are trending. Hopefully things will recover.

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  17. I think we have to be prepared for a recession we have to be prepared because we don't know what is going to happen exactly with this Nova Coronavirus so we have to think ahead

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  18. coronavirus has been decrease day by day

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  19. The good thing about this whole thing is that this will be over soon!

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  20. Wow. I've already started to see the impact on gas prices. I really hope this all blows over soon. Thanks for sharing!

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  21. This is definitely a horrible time in the entire world, as this plague is continuing to spread all over the globe and it's up to us to limit this. We should all cooperate to the authority and stay at home.

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  22. This is so crazy, thanks for sharing this so people understand what is going on!

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  23. Unbelievable to see the world taking such a hit with the coronavirus...

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  24. Worries that broken supply chains would stoke inflation also look overdone, for now at least. Data to the beginning of March from State Street PriceStats Indicators, which measures inflation daily, suggest that inflation has been on a steady downward trend since the beginning of the year (though in recent days food prices have inched up, perhaps pointing to the effects of stockpiling).

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  25. A lot of small businesses are feeling the effects of this right now. We're all going to be affected in some way or form, and although it will reset some of the inflation, I am definitely hoping that it won't be too catastrophic on the world economy.

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  26. They say that Japan has already entered into recession thanks to the coronavirus but also the recent consumption tax hike. Analyst think that Olympics will help Japan get out the slump, but we don't know if the Olympics are going to help.

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  27. Unfortunately the impact of Coronavirus has been extremely harsh on the economy. Hope things around the globe get better soon.

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  28. The economy around the world is suffering so badly. I don’t even want to look at my investments right now. Hope things will get better soon!

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  29. Great post.
    Lots to take in with the coronavirus pandemic. One thing is for sure, it will pass because no matter how long and bitter winter may be, spring always appears.
    When it's over there will be lots of opportunities because opportunity always follows recession.
    Best,
    Pedro

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  30. The worst I've ever seen since birth , it brings down every business even online business like fiver upwork facebook ads,google ads ..

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  31. This really saddens me and I hope it will pass soon. Thanks for sharing.

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  32. It's scary that covid 19 has such a huge effect on so many different things!

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  33. It's so sad how many people are affected by COVID-19. I hope that we figure it out soon.

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  34. This is really going to leave a big dent on the world economy. Hoping it will not last too long though.

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  35. I agree with MsKathyKenny about leveling the playing field. Everyone is going through it together. It's just hard to deal with the fact that it is out of everyone's control. I just want to get past this ASAP!

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  36. Chelsea Sauve - WandureTue Mar 24, 02:54:00 AM 2020

    Such a scary and uncertain economic future. Thanks for sharing this insight.

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  37. Covid-19 is really serious issue many people died and infected everyday around the globe. All businessmen shutting their business and people losing their jobs because of this crisis but despite that the only thing that we can do right now is pray and don't losing hopes.

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  38. The world is really suffering now because of this Covid-19. However, I still pray that things will be ok. Thank you for sharing this intellectual post.

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  39. If you have better information about this topic COVID-19 then it is very good. I really like the topic
    IT'S MATERIALISTIC

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  40. Yeah, it's just not good right now. Hoping we come out of this!

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  41. I am the victim of coronavirus. I have lost sum of Rs. 60k in one day in share market

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  42. Wow, that's a terrifying economic dive. I'm not surprised, though. Hopefully we'll get through this okay and afterwards start creating a system that can accomodate another major recession like this.

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  43. Ti's a scary jump and we can just pray that the economy will recover fast, or else many people will go hungry.

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