The world economy appears to be in a long-term economic downturn from the novel coronavirus (COVID-19) outbreak, which has now spread rapidly from the world's second -largest economy - China to all the continents. Coronavirus forced the world people to be confined in the house. As this much-discussed virus is spreading at a fast pace worldwide, all kinds of daily activities are being hampered causing huge financial loss.
Apart from trade activities, the education sector is widely being collapsed due to closures of institutions in coronavirus-affected countries. If the virus persists on earth for a longer period, global economy would surely experience a challenging situation with rising inflation and unemployment rate, no doubt.
According to international news agencies, the death toll from coronavirus has reached 9,391 globally with infecting 2,31,362 people as of 19 March, 2020. Currently, a total more than 160 countries are fighting against this deadly virus to save lives. Following hasty spread of coronavirus, the countries having high economic strength imposed restrictions on frequent movement.
The people of affected countries are being requested not to attend any gatherings and festivals. VISA centers in many countries have also been asked to close their doors. Even though, the affected countries' people are not allowed to go abroad. So, the world is now passing every moment in fear of coronavirus. India closed its border gates with Myanmar and stopped issuing visas to France, Spain and Germany.
As of March 19, around 3,245 people in China, 2,978 in Italy, 1,283 in Iran, 803 in Spain, 161 in USA, 91 in South Korea, 264 in France died of coronavirus indicating that the virus is going to kill more in the days to come. In viewing so many death tolls in recent past time, Geneva - based World Health Organization termed coronavirus as pandemic.
That should be noted here that airline, hotel industry and tourism sector have fallen in great danger due to impose restriction on movement from one country to another. It was reported that the aviation sector was obliged to suspend more than 70 percent flights with getting no passengers.
Global Business Travel Association disclosed that the global business travel sector is expected to take a revenue hit of about $ 820 billion in the face of coronavirus epidemic. China, which has seen a 95 percent drop in business travel since the outbreak, is expected to lose $ 404.1 billion in revenue from corporate travel , followed by $ 190.5 billion in loss for Europe.
In light of above noted situation I want to draw conclusions with saying economic impact for coronavirus outbreak with which thousands are infecting weekly. Since global famed traders are being seen to pass idle time without trading, the trade volume is significantly decreasing.
A good number of deals associated with export and import had already been cancelled that are affecting millions workers in respect of continuation of their regular jobs. So, the employed people in private sectors are likely to lose their jobs shortly as running industries are not preparing the ordered products.
Raw materials supply from one country to another has been stopped. In this moment, there is no possibility of holding millions workers in production and service centers with high salary and wages. As export-import activities remain nearly closed, inflation rate is gradually on the rise. Already high branded mobile phones and accessories that are imported in Bangladesh from China in large scale cost more to purchase.
China known as coronavirus originating country exports its own made products to hundred countries with cheaper rate. But, export of products from china is now totally unnoticed resulting in rising prices of Chinese products. a dozen countries, where coronavirus is spreading fast , are seriously thinking to close their business operations including schools , colleges and universities.
As a result of closures privately owned organizations, there is possibility of rising unemployment rate to a great extent. There is no alternative to shut down loss making organizations that are run privately.
United Nations Conference on Trade and Development (UNCTAD) said that Coronavirus could shrink global Foreign Direct Investment (FDI) by 5 percent to 15 percent. The slowdown of manufacturing in China due to coronavirus outbreak is disrupting world trade and could result in a $ US 50 billion decrease in exports across global value chain- UNCTAD also reports.
"In addition to grave threats to human life, the coronavirus outbreak carries serious risks for the global economy," UNCTAD Secretary-General, Mukhisa Kituyi said. As a Bangladesh-born analyst of economic affairs, I strongly believe that the world is set to face stagflation situation in the economy. Stagflation means combination of high inflation and unemployment rate in economy.
Particularly, COVID-19 affected countries, that have high unemployment rate, had better start race in tackling coronavirus any how to keep their economies sustainable. Mainly, import dependent economies should make no delay to find out alternative sources to survive on earth with their own resources available to them. To conclude, only creator almighty Allah can save human being from fast spreading deadly coronavirus outbreak.
The writer is an analyst of Economic affairs.
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