- China’s automobile sales lowered by more than 80 percent because of the coronavirus outbreak.
- The economy of countries that are connected to China is expected to suffer more losses, most notably Australia, Japan, and South Korea.
- Global air carriers are expected to lose up to $110 billion in 2020.
The number of confirmed COVID-19 coronavirus cases continues to rise all over the world, and it is safe to say we are dealing with a real pandemic. While up until recently, the majority of cases were in China, the situation began to change in late February.
More and more cases continue to appear in other countries, and all aspects of our society are in danger of suffering severe consequences once we are done fighting off this virus. The global crisis caused by the COVID-19 coronavirus has made many economic analysts start making grim predictions of the financial world.
Even though energy prices have begun lowering more and more, the world’s biggest producers of energy decided not to make any changes to their production levels. This has helped nurture an aura of uncertainty among the big investors. Another thing that makes people feel like the economic consequences of the COVID-19 coronavirus will be massive is the fact that most of the governments still do not have an effective response to everything that is happening.
The impact this pandemic will have on the economy will largely depend on how fast we manage to contain the virus. One more thing that could determine the impact is the amount of economic aid the governments will be willing to distribute during the epidemic, and more importantly, after it.
6. The World Of Sports Will Take A Blow
All of the major sporting events in the world have been indefinitely postponed until we manage to get rid of this epidemic. This will not pass without major economic losses for all of the clubs and the leagues. Not only that, but many sporting brands will also suffer major losses due to not being able to advertise their newest products at sporting events.
The losses that are expected to happen because of the lack of sports events might have a more significant effect than it seems at first. Millions of viewers tune in daily to watch these events, and it allows a large number of companies to promote their products. This might be a massive blow to them and their revenues.
Overall, the economic consequences of the COVID-19 pandemic are expected to be long-term, although not quite as severe as it may seem at first. Of course, nothing is certain, mostly because we still do not know how long the epidemic is expected to last. Once we have found a way to combat it reliably, we will be able to predict how it will impact the economy more efficiently.
5. The Film Market Will Be Negatively Impacted
The international film market is expected to lose more than $5 billion because of low box office sales. Many companies have postponed the release dates of blockbuster movies because of this virus outbreak. Since people are advised not to attend any mass gatherings, most cinemas will close their doors until we have found a way to contain the COVID-19 coronavirus.
This will have a significant impact on the film industry, with entertainment titans like Disney expecting a severe impact on their revenues. However, with people using streaming services more than ever, some of the losses could be negated that way.
4. Tourism And Travel Will Be Affected
Industries related to tourism and travel, in general, are expected to suffer the most significant losses due to the coronavirus outbreak. Since it is advised to stay indoors and avoid any social behavior, not only will people not travel overseas, they will not be leaving their cities for a long time. It is expected that the global air carriers could lose anywhere between $60 billion and $110 billion in 2020.
3. Countries Connected To China Will Suffer
It is expected that the countries whose economy will be most affected by the COVID-19 coronavirus are those who are more connected to China. Some of the more notable countries on that list include Australia, Japan, and South Korea. Since a large part of their economy is dependent on the Chinese market, which is enormous, these countries might start seeing some significant economic losses.
As the virus continues spreading, more and more countries will begin adopting restrictive measures that will constrain manufacturing ventures. This is expected to happen at most large regional hubs, starting with Northern Italy.
2. The Demand Will Drop
Analysts expect the estimated growth of the economy in China to slow down tremendously. Many believe that the country will experience its first drop in quarterly GDP since 1992. The demand from other countries will drop since they are also combating the virus.
The possibility of a recession is the highest in Europe and Japan, seeing as how these countries had extremely bad fourth-quarter performances in 2019. The appearance of the COVID-19 coronavirus could cause a recession to appear sooner than expected, which would leave a significant negative impact on these regions. Europe and Japan are also highly reliant on trade, and since trade is greatly affected by the coronavirus epidemic, the chances of them avoiding the recession are incredibly slim.
1. Losses In The Manufacturing Sector
The services and manufacturing sector could start seeing significant economic losses. Because of the coronavirus pandemic, China’s automobile sales lowered by more than 80 percent, which is as low as they ever were. The entirety of exports from China has been reduced by 17.2 percent in the first two months of 2020.
Most analysts expect an overall slowdown in all economic activities. Interestingly, one of the indicators for this is lower pollution levels. While this means the economy will suffer, it might give the environment a long overdue breather.