Coronavirus(COVID-19) is having a massive impact on businesses worldwide right from tourism to engineering and technology industries. China, the world’s second biggest economy has prompted large parts of the country to be shut down, with many factories and shops closing their doors.
- Apple’s chinese supplier, Foxconn has halted almost all of its chinese production
- Airbus stopped its production line in Tianjin
- Hyundai and Honda has halted it’s production lines
- Disney has closed two theme parks that are usually busy over the lunar new year
- Nike, Adidas, H&M, Disney, Ikea, Calsberg, Burberry, Aston Martin to name a few other companies that had impact from Coronavirus.
Bank of England governor, Mr. Mark Carney in evidence to the House of Lords economic affairs committee said: “We should all acknowledge the pain and the suffering that is real and spreading and including in this country.” “While there are some signs of slowing in the pace of infections in China itself, it’s still very, very early days. “This is, from an economic perspective, already bigger than SARS and it is just too early to say the overall macroeconomic impact.” He said: In general, the experience has been with pandemics that they can have quite significant impacts but much of it is recovered in subsequent quarters”
US Fed chairman Jerome Powell said: ‘We’ll just have to see what the effect is globally’. He said there would “clearly be implications at least in the near term” for growth in China and neighbouring countries.
The number of coronavirus cases around the world has now surpassed 45,000 with 1,116 deaths recorded as of February 12th, 2020. Economic fears about its spread have been increasing alongside its human toll. The ultimate impact on the Chinese economy, as well as the global economy as a whole, will ultimately depend on how broadly it will spread and how virulent it will be.
The disease has already proven highly disruptive to China and a new Moody’s forecast estimates that it will cut more than 2 percent from Chinese real GDP growth at an annualized rate in the first quarter of this year and 0.8 percentage points from growth for the entire year.