The coronavirus presents the biggest danger to the global economy since the financial crisis.
• China is the world’s second-largest economy and leading trading nation. China’s economic growth slowing to 4.5% in the first quarter of 2020, also threaten global growth.
• The outbreak could cost the airline industry $113 billion in lost revenue. There are lots of airlines that have got relatively narrow profit margins and lots of debt and this could send some into a very difficult situation
• Factory shutdowns are slowing the flow of products & parts from China, affecting companies around the world. Chinese stock markets and the cancellation of important trade fairs and sporting events in the region, all are contributing to money lost for local and global economies.
• China is also the world’s biggest oil importer. With coronavirus hitting manufacturing and travel, the International Energy Agency (IEA) has predicted the first drop in global oil demand in a decade.
Impact On Indian Economy
India is among the 15 most affected economies due to the coronavirus epidemic. The trade impact for India is estimated to be about 348 million dollars. The sectors to be the most affected are Chemicals sector, Textiles and Apparel, Automotive sector, Electrical Machinery, Leather products, Metals and metal products and Wood products and Furniture. “The Indian economy is relatively insulated as it is not majorly integrated into the global supply chains and not a major exporter to the global markets. Indian businesses could benefit from a fall in crude prices by way of lower fuel and input costs. Besides, the cost of overseas borrowing would also decline as the yields on US Treasury bonds fall.” Bloomberg Economics.The most affected economies are - The European Union, USA, Japan, South Korea, Taiwan and Vietnam.
