Global Economic Impact of Coronavirus – Assessment and Mitigation (A)
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Case Code: ECON082 Case Length: 12 Pages Period: 2019-2021 Pub Date: 2020 Teaching Note: Available |
Price: Rs.300 Organization : - Industry : - Countries : Global Themes: Global Economic Slowdown Due to COVID-19, COVID-19 Impact on Global Economy, Global Economic Slowdown, Policy and Responses to Revive Economy |
Abstract Case Intro 1 Excerpts
"This virus is as economically contagious as it is medically contagious. This one is economically big, because it is now hitting the big economies. The size of the economic shock is a different order of magnitude than any pandemic we have seen."
– Richard Baldwin, Professor of International Economics, the Graduate Institute in Geneva, March 9, 2020.
Introduction
"We envisage a slowdown in the global economy to under two per cent for this year, and that will probably cost in the order of $1 trillion, compared with what people were forecasting back in September," cautioned Richard Kozul-Wright, Director, Division on Globalization and Development Strategies at the United Nations Conference on Trade and Development (UNCTAD), on March 9, 2020.
On December 31, 2019, China alerted the World Health Organization (WHO) to several cases of unusual pneumonia in Wuhan, a port city of 11 million people in the central Hubei province. The virus was unknown then. On January 7, 2020, Chinese officials declared they had identified a new virus, according to the WHO. The virus was named COVID-19 and was identified as belonging to the coronavirus family, which included the severe acute respiratory syndrome (SARS) virus and the common cold. By January 24, 2020, the death toll in China due to COVID-19 stood at 26, with the government reporting more than 830 infections. On January 26, the death toll rose to 56, with almost 2,000 cases confirmed even as travel restrictions were increased and Hong Kong closed its Disneyland and Ocean Park theme parks. By January 26, new cases were confirmed in the US, Taiwan, Thailand, Japan, and South Korea. The WHO declared coronavirus a global emergency as the death toll in China jumped to 170, with 7,711 cases reported in the country, and the virus having spread to all 31 provinces by January 30.
As of March 9, 2020, the virus had killed at least 3,800 people and infected over 110,000 worldwide, mostly in China. As of March 10, 2020, the COVID-19 had affected 115 countries and territories round the world besides the Diamond Princess cruise ship harbored in Yokohama, Japan. Apart from China and Hong Kong, the other countries most affected by the COVID-19 epidemic were Italy, South Korea, Iran, France, Spain, Germany, the US, Japan, Switzerland, the UK, the Netherlands, Sweden, Belgium, Norway, Singapore, Austria, Malaysia, Bahrain, Australia, and Denmark.
Apart from the tragic human consequences of the COVID-19 epidemic, the economic uncertainty it had sparked was expected to cost the global economy over $1 trillion in 2020. 5 After weeks of relative tranquility about the global spread of the novel COVID-19, financial markets snapped to attention in early March and plunged with dizzying speed. US stocks lost nearly 12% and $3.5 trillion was erased for US-listed stocks by March 02, 2020. It was the worst week for stocks since the financial crisis in October of 2008....
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