During covid-19 pandemic, over 16,000 people tested positive in South East Europe. However, market analysis for South East Europe shows a slowdown in the SEE economies. Those heavily rely on trade with investments from European countries, especially Germany and Italy....
COVID-19 is, first and foremost, a global humanitarian challenge. The covid-19 facts and insights are showing the reality of the health system and how the world is battling this crisis. Thousands of health professionals are heroically battling the virus, putting their own lives at risk. Governments and industry are working together to understand and address the challenge, support victims and their families and communities, and search for treatments and a vaccine. Companies around the world need to act promptly.
There are two possible Epidemiological scenarios. Delayed recovery: The virus continues to spread across the Middle East, Europe, and the US until mid-Q2 2020 when virus seasonality combined with a stronger public health response drives caseload reduction.
Prolonged contraction: The virus spreads globally without a seasonal decline, creating a demand shock that lasts until Q2 2021. Health systems are overwhelmed in many countries, especially the poorest, with large-scale human and economic impacts.
Also, there are two economic impacts. China and East Asian countries start recovery but supply chains remain impaired US and Europe large – scale quarantines, travel restrictions, and social distancing drive drop-off in consumer spending and business investment in 2020.
China and East Asia experience double-dip slowdowns as economic recovery is derailed in 2020 and pushed into Q1 2021 The United States and Europe experience demand-side reductions in consumer and business spending and deep recessions in 2020.
The COVID-19 outbreak has generated both demand and supply shocks reverberating across the global economy. Among major economies outside of China, the OECD forecasts the largest downward growth revisions in countries deeply interconnected to China, especially South Korea, Australia, and Japan.
Major European economies will experience dislocations as the virus spreads and countries adopt restrictive responses that curb manufacturing activity at regional hubs, including in Northern Italy. As a result of depressed activity, the United Nations projects that foreign direct investment flows could fall between 5 and 15 percent to their lowest levels since the 2008-2009 global financial crisis.
At the sectoral level, tourism and travel-related industries will be among the hardest hit as authorities encourage “social distancing” and consumers stay indoors. The International Air Transport Association warns that COVID-19 could cost global air carriers between $63 billion and $113 billion in revenue in 2020, and the international film market could lose over $5 billion in lower box office sales.
The COVID-19 Facts
Similarly, shares of major hotel companies have plummeted in the last few weeks, and entertainment giants like Disney expect a significant blow to revenues. Restaurants, sporting events, and other services will also face significant disruption. Industries less reliant on high social interaction, such as agriculture, will be comparatively less vulnerable but will still face challenges as demand wavers.
Economic slowdowns generally lead to lower energy demand, and the fallout from COVID-19 has proved no different. Often, producers respond to demand slumps by cutting supply to buoy prices. The damage from the Saudi-Russian price war sends an unsettling signal to markets hungry for a coordinated policy response to the epidemic, especially considering Saudi Arabia’s current role as G20 president.
Therefore, in response to the price shock, large oil producers, including firms, could pare back investment and production, with heavily indebted firms in particular at risk of layoffs, consolidations, and even bankruptcy.
Thus far, national governments have announced largely uncoordinated, country-specific responses to the virus. In China, the epicenter of the outbreak, officials announced billions in special-purpose loans to companies facing liquidity constraints as well as financial support to specific sectors such as aviation.
In the United States, the Federal Reserve cut the policy rate in an emergency action on March 3, and on March 9, in coordination with other U.S. bank regulators. It encouraged financial institutions to meet the financial needs of customers and members affected by the coronavirus. That being said, this is a move aimed at supporting financial conditions to prevent the growth shock from turning into a broader financial crisis.
Moreover, in regards to coordinated action, on March 6, the G20 finance ministers and central bank governors pledged to take “appropriate” fiscal and monetary measures but made no specific commitments.
Scientists do not yet have a clear understanding of the virus’s behavior, transmission rate, and the full extent of contagion; uncertainty will be part of the backdrop for the foreseeable future. Coherent, coordinated, and credible policy responses provide the best chance at limiting the economic fallout from what is already and sadly a human tragedy.
The covid-19 in Croatia according to assessment of the health system is tackling the health issue. As of 4 May, the infection curve seems to be flattening. With a decrease in new cases compared to previous weeks. The Government has stated that the epidemiologic...
As the COVID-19 changes buying behaviour, the economic impact on e-commerce could be longlasting. As people come to terms with their new living situations, their buying behaviour has adapted to suit their needs. While panic buying may have slowed in some countries,...