Coronavirus: How Will COVID-19 Pandemic Affect Global Economy
The coronavirus could bring the world economy to a standstill. Personal finance concerns related to the spread of coronavirus are mounting. Around five million people in China already lost their jobs. Individuals who work for businesses involved in international trade will feel the impact most directly. Other employees will be affected by event cancellation around the globe. These include venders, retails shops, hotels, and transportation services.
Many countries, including Hong Kong, are giving their citizens cash payouts to cover living expenses during the outbreak. While many are calling for a "rent brake" to help tenants struggling with coronavirus.
The current situation could lead to recessions in the U.S., EU, and Japan in addition to the slowest growth on record in China and a total of $2.7 trillion in lost output. Which is equivalent to the entire GDP of the U.K.
While the possible trajectories of the pandemic are yet to be discovered, the economic risks of the coronavirus pandemic are clear. Risks include higher costs for health systems.
The disruption and reduction in labor productivity and decreased trade and decline in travel and tourism. Multiple moderate and extreme scenarios could emerge.
A recent survey found that by late February, 80% of manufacturing firms in China had resumed operations. Production capacity should be back to normal by late April. This scenario would lead to a recovery by the end of the year.
Major economies other than China that were hit by the coronavirus including South Korea, Germany, France, and Japan could take global growth for 2020 down to 2.3%. A 3.1% growth forecast was projected before the virus outbreak.
In a more severe scenario, global growth for 2020 will slide to 1.2%. The EU and Japan could go into recession and U.S. growth might drop to 0.5%