Coronavirus has got widespread across the world and is creating big trouble for the various countries and its people. After China, more than 196 countries across the world have got the infection and now there are numerous positive cases reported.
More than 4,50,000 positive cases and 21,000 deaths have already occurred due to this deadly virus. The global economy is at back-foot due to this as various sectors have been badly affected. Let us check out the economic impact of this virus.
Impact on Airlines
When the virus had initially started spreading in China, many airline operators canceled flights to and from China. Many countries came out with travel advisories for China and alerted their citizens to avoid traveling to China, especially Wuhan which is the epicenter of the disease.
This alerted the people and they stopped traveling to stay safe and eventually all the flights to China were canceled. Chinese airlines faced a huge loss at this time and are still facing.
Then eventually with the widespread of the virus to other parts of the world, many countries imposed strict screening of the passengers at the airport and some stopped the arrival of foreign passengers altogether.
In some countries, passengers arriving from abroad have to get quarantined for 14 days. As a consequence, demand for the flights got dropped down drastically and eventually, it led to the cancellation. Many airline companies gave their employees one-month paid leave due to this.
This is leading to an economic crisis for airline operators. It is estimated that airline companies will face a loss of $100 billion this year.
Stopping the Global Supply Chain
Due to this virus, many countries are completely locked down and people are forced to stay at home.
Only the essential services are running and all other services have been stopped in most of countries. The operations of Food, medical, banking, petrochemicals, and other essential services are continued and rest all is stopped which will lead to an economic crisis.
As the production of various items has stopped, many workers are forced to stay home at this time. Employees are fearing that if this situation lasts long then there are chances that the companies start firing them. Will their wages get paid for the time they are locked down at home or not is a question tickling in the mind of most of the people.
Both the service industry and the manufacturing sector are badly affected and the PMI (Purchasing Managers’ Index) has dropped down drastically for both these sectors all over the world.
This is breaking the global supply chain and the demand for most of the commodities apart from the essential ones has already gone down. There is a fear that this will result in an even worse recession than the 2008 economic slowdown showed to us.
The share market is down due to the coronavirus outbreak and many investors have already lost a huge amount due to this. Financial analysts and Investment experts are worried about the economic impact that this pandemic is going to bring for the world.
Postponement of the Tokyo Olympics
Tokyo Olympics that was supposed to start from 24th July 2020 and was going to get continued till 9th August 2020 is now going to get postponed to next year. Shinzo Abe, Japanese Prime Minister, and IOC President, Thomas Bach jointly agreed that it is in everyone’s favor to postpone the games to the next year.
It is obvious that due to Corona, Japan will be facing difficulties in arranging the event. Also, the players will be facing hurdles in the preparation so it is good that the event has been delayed by one year. But, Japan will be facing a heavy economic blow due to the delay in the event.
The event will be still called Tokyo 2020 even though it will take place in 2021.
Tourism and Restaurants Facing a Big Crisis
During the coronavirus pandemic, the tourism industry will be in big trouble. People can’t travel anywhere at this point in time and so there are no chances of travel agencies and tour booking operators to earn any business these days. Many people in this industry will lose their employment until Corona lasts.
The same is the case with hotels, restaurants, and cafes. Hotel rooms are empty so no revenue generation for the hotel owners until Corona lasts. No one goes out for eating these days and so restaurants and cafes are having a hard time too.
Many restaurants are taking online orders via the food delivery applications so there are a few chances of earning something. It is very hard to imagine how they will earn their living these days.
So, here was an overview of the economic impact due to the Coronavirus. I hope the spread of the virus stops soon and the positive cases get controlled then only we can think of the situation around the world to get back to normal and the economic growth proliferating once again. For more information visit Financeshed.