Global economic shock from Coronavirus (COVID-19) outbreak and its impact on world economy

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This is the third article in the COVID-19 series, In this article, let’s know about the global economic shock from Coronavirus in no time.

Let’s get started,

Please Note: The starting point for our analysis is what’s happening in China We consider the Chinese market and economy in most parts of this video because they are the first who got affected and slowly started recovering. From this, we get some notion to estimate our situation in coming future.
Whatever the data we discuss in this video comes from legitimate sources like WTO, UN, BBC, Bloomberg, Harvard Business Review, Financial Times and Economic Times

What is the impact on stock markets since the start of the outbreak?
Have a look at this graphical comparison of 3 major stock markets indexes:

1. Nikkei - Stock market index of Tokyo stock exchange
2. Dow Jones - stock performance of 30 large companies listed on stock exchanges in the United States
3. FTSE - The Financial Times Stock Exchange is the share index of the 100 companies listed on the London Stock Exchange

All have seen a huge fall

• Look at the week on week change of FTSE 100, look at the worst week, it appears to be more dangerous than the big financial crisis occurred in 2008.
• More than 100 countries have travel restrictions.
• The total number of daily flights fallen drastically.
• Industrial production has been stopped and in China it fell by 13.5% in the first 2 months of the year.
• Car sales in china fallen by 86%.
• Oil prices also got affected.
• Have a look at the GDP growth comparison between 2019 and 2020 of major countries in the world and the overall GDP growth of the world. It is downgraded.
• The global economy could shrink by up to 1 percent in 2020 due to the coronavirus pandemic.
• According to The World Trade Organization - World trade to decline 13-32% in 2020.
• According to the Bank of France data, the French economy shrinks 6% in Q1

Then what is the learning from this and what precautions we must take in order to survive?

• China shows that we can stop coronavirus through containment - but at a significant economic cost.
• Globally, the coronavirus shock is severe even compared to the Great Financial Crisis in 2007–08.

The severity of the economic impact will largely depend on two factors:

1. The duration of restrictions on the movement of people and economic activities in major economies
2. The actual size and efficacy of fiscal responses to the crisis.

What Coronavirus Could Mean for the Global Economy?

• According to Bloomberg, the Coronavirus Could Cost the Global Economy up to $2.7 Trillion.
• According to the latest United Nations report, The world economy will go into recession due to the coronavirus pandemic, with the exception of India and China. This is the only good for Indians and Chinese but not sure.
• Economic times analysis also warns that the adverse effects of prolonged economic restrictions in developed economies will soon spill over to developing countries via trade and investment channels.

Whatever we talked about till now, all these issues already the world is facing.

Then what we don’t know is? what is going to happen in the future?
Let’s unveil that in the coming article on issues coronavirus brings in the future, who are the sufferers and big losers? based on analysis and predictions.

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Sources:
https://www.bbc.com/news/business-51706225
https://www.bloombergquint.com/business/covid-19-impact-world-economy-to-go-into-recession-except-india-and-china-un-says https://www.bloomberg.com/graphics/2020-coronavirus-pandemic-global-economic-risk/ https://hbr.org/2020/03/what-coronavirus-could-mean-for-the-global-economy https://www.ft.com/content/0c13755a-6867-11ea-800d-da70cff6e4d3 https://economictimes.indiatimes.com/news/international/business/corona-beer-producer-halts-brewing/articleshow/74973707.cms