Coronavirus hit China in late 2019 and since then it has been declared a global pandemic, posing serious harm to vulnerable populations and a challenge for global economy. Analysis of recent infographics and fast transmission shows that it has the potential to engulf populations, devastate health system and can trigger the long-lasting geopolitical change. Around the globe, desperate efforts are in motion to control this profoundly disruptive outbreak.
Until now 199 territories and two international conveyances are under the wrath of COVID-19. More than 737,760 people are affected globally with 35,701 deaths. Preventive measures ranging from lockdowns to social distancing are practiced around the world, consequently pushing the global economies towards recession.
With the global spread of COVID-19 virus, major economies had setback due to social distancing measures adopted. Stock markets are shaken and global growth has been uncertain, alongside impacting health and dynamics of economics.
United States of America crossed China and Italy in terms of people effected. Though an advanced economy, this outbreak has resulted in recession this year. The world largest economy registered 3% drop in gross domestic product (GDP).
China the epicenter of this pandemic has suffered second order effects. Its exports plunged 17.2% in Jan-Feb; imports cut down 4%; significant drop in consumption; slower return of workers to manufacturing units. Aforementioned effects make it easier to visualize the pace of global growth engines- halted speed.
Global supply chains are negatively impacted by this outbreak. COVID-19 crisis has exposed that China being a strong economy with its claws in all other territories, which meant a global collapse of system. It pinpointed the need for supply chain diversification. It has inculcated a sense to states to insulate them from a shock in the China-centered global production network.
Travel sector has been impacted greatly by this outbreak. Restricted use of aerospace and ban over movement negatively impacted the economy, as travel is among the major contributor to economic growth.
Even the strong economies will require years to replenish the economic growth pace as economies are facing a demand shock. Demand shock and probability of re-invasion of virus will further alter the pace. The organization of Economic Cooperation & Development (OECD) warned that the shock from coronavirus is much bigger than global financial crisis. OECD’s secretary general said, “Even if you don’t get a worldwide recession, you’re going to get either no growth or negative growth in many of the economies of the world, including some of the larger ones, and therefore you’re going to get not only low growth this year, but also it’s going to take longer to pick up in the in the future.”
In order to fight against this pandemic and for smoother economy, economists, policymakers and advanced economies should coordinate efforts to have global impacts.
by: Marria Ghalib