I’m starting this thread for those who are interested in coronavirus’s economic impact.
How much does it impact the global economy and what are the consequences of it?
As we could see on the World Economic Forum:
China’s economic growth expected to slow to 4.5% in the first quarter of 2020 – the slowest pace since the financial crisis, according to a Reuters poll of economists.
“Global oil demand has been hit hard by the novel coronavirus,” says the International Energy Agency.
Factory shutdowns are slowing the flow of products and parts from China, affecting companies around the world, including Apple and Nissan.
As China grapples with the coronavirus, the economic damage is mounting around the world.
Businesses are dealing with lost revenue and disrupted supply chains due to China’s factory shutdowns, tens of millions of people remaining in lockdown in dozens of cities and other countries extending travel restrictions.
BNP advises investors to consider investing in Asian markets with little ties and even lesser dependence on China’s production industry. But also, we can expect a sharp rebound of the Chinese stocks after the virus is gone.
I haven’t watched that video yet, I will when I have more time. But I wanted to put a question out there since I don’t really understand whats going on with the Coronavirus. (If any of this is addressed in that video, sorry, I’ll watch it tonight)
Why is this such a big deal? The Coronavirus is about half as deadly as the Flu, 3.4% compared to 6.8%. Italy (383 cases) only has a death rate of 3.2%. South Korea (1261) and Japan (172) have death rates less than 1% Younger than 50 the death rate is 0.2%. SARS and MERS (something I didn’t even know about til this morning) had much higher death rates.
I know i’m harping on death rates, but if its not particularly deadly, I don’t understand the panic. And I’m not trying to argue, I just ignorant as to why this is having such an impact when it doesn’t seem really serious based on the numbers.
What is serious is that China is having many economic problems because of the virus outbreak. And China is interconnected with many other economies depending on her.
@zacj346, No one really knows the true Ro or the death rates of this contagion… China isn’t telling the truth about the numbers infected or deaths… the CCP is desperate to retain control and doesn’t have enough police (or army) to subdue millions of marauding citizens in their cities. Fear is the only weapon that will stop chaos.
Governments of most countries (including Australia) are refraining from releasing the true extent of what is happening on the ground in a bid to stop anarchy, panic and runs on essentials in stores.
We will have a better idea of the real numbers now the Virus has spread to Europe and beyond… If the rates coming out of Iran are true, the figures are frightening, but this is another regime that information cannot be properly verified.
The main issue is the sharp Global slowdown of trade between countries… This may cause even more carnage than the GFC once it’s over… the world’s economies where already starting to fracture… the Coronavirus has just sped up the decline to a level that is very damaging to fragile or exposed countries.
It seems it already puts a lot of pressure on some of the major currencies - GBP/USD, USD/JPY and EUR/USD, for example. As well as to some US and other indexes, like Dow Jones and S&P for example.
I think this fact alone has markets in fear. China isn’t known for its transparency. But also, like Trendswithbenefits is saying, there has to be a balance in communications. Too much negative information and you have a panic on your hands. Not enough information and you get conspiracy theories galore.
What I’m wondering is how this will affect the US stock market. I mean we saw what happened last week but today it looks like it’s starting to rebound. Wondering if this is temporary and we’re still gonna see continued selloff in the coming days…
Maybe it sounds a little bit cruel- but now, as we have the infected also in our countries (Europe) we will know in nearest future how high the death rate realy is…
Another interesting fact is, that bad news do not allways influence the markets in the way also the bank analysts expect them to move (i mean currencies, indices, commod, shares…) So the rule “more corona infected in South Corea and in Europe makes the Aussie/Kiwi and EUR fall and gold will rise” was proven absolutely wrong, when we remeber what happend to gold for example.
But there is no doubt, that economical circumstances change,and that has negativ impact on special parts of the economy, what leads logically to governmental actions like increasing the money supply to support the companies.
And if its not possible to controll this virus within next weeks, one thing is definetely sure.:as i mentioned above gold does not react immediatly on bad news release,but on weeks basis gold will head against 1700 or higher
This pandemic is costing humanity so much - first in terms of lives lost and then in terms of ruining the economy. How I wish the world had reacted faster and harder the moment we all saw what happened in Wuhan.
70% of international flight capacity gone. Nuts. All the major American airlines have asked for aid, some getting it this week. But man, I could see depressed flight capacity go on for months.