Impact of Coronavirus on the World Economy

The deadly coronavirus, which is spreading rapidly around the world, has severely affected the global economy. Not only the demand but also the supply of goods and services are badly affected in the present situation. At the international level almost all the stock markets, which were at the top level two months before but after the rapid spread of Coronavirus, have fallen by more than 30 percent. More than 50 percent decrease is reported in the international crude oil prices since the first meeting of the World Health Organization (WHO) on Corona on 24^th January 2020, amid increased supply of oil and decreased demand. Presently the international crude oil prices are nearly equal to the 20 years old prices. The present price war between Saudi Arabia and Russia is another reason behind the debacle of crude oil prices. Reduction in the crude oil prices is bust to the oil-importing counties like India, Pakistan, Bangladesh, Shri Lanka to reduce their fiscal deficit. But for the OPEC countries, it is going to be a big dent in their economy. At the same time, the consumption of crude oil is decreased by 30% globally because of lockdown. Presently more than 140 countries are affected because of Coronavirus. The Organization for Economic Co-operation and Development (OECD) estimated 50 basis points (2.9 percent to 2.4 percent in 2019) in global GDP in the first week of March in an interim economic review report. World Bank has predicted India’s GDP growth rate would be just 1 to 1.5 percent for the financial year 2020-2021, before three months it was predicted 5 to 6 percentage. World Bank’s prediction on India’s GDP growth rate shows the drastic negative impact of the coronavirus on the world’s third-largest economy. Presently Indian Rupees have reported its all-time low against United States Dollar.

Press release issued in the first week of March by the Asian Development Bank (ADB), said that Corona is going to have a major bang on the developing Asian economy. It estimated that Corona could cause a loss of $ 77 billion to $ 347 billion to the world's economy, from 0.1 percent to 0.4 percent of global GDP. According to the Goldman Sachs report (released in the last week of February), this is a setback for the demand for large commodities since the 2008 economic downturn following the Chinese economy stalled due to the coronavirus.

Corona has caused a historic decline in production and non-production activities in China in February 2020. Dr. David Kelly, Chief Global Strategist of JP Morgan's said that they have one report on a current situation and according to it the impact of the Coronavirus on the global economy will be mostly seen in the second quarter of 2020. The report here said- "After the social distancing, there will be maritime tourism, airlines, hotels, casinos, sports programs, movies, theaters, restaurants and other industries." He feared that this would have a straight bang on the financial system of the globe, including the US, UK and because of this there will be a big axe on the job market.