The Effect of Coronavirus on the Global Economy

By Dr. Frank Musmar

EXECUTIVE SUMMARY: The 2020 outbreak of the novel coronavirus (COVID-19) will go down in history for its massive impact on the global economy and on public health, both physical and psychological. At some point, life will get back to normal, but it will not be the same as it was before. People have been panic buying over the past two weeks as they wake up to how unprepared they are for a crisis. As a result, many are rethinking their spending habits and what necessities they should have on hand. Some of these temporary adaptations will become permanent as people discover that they prefer them to old ways of doing business.

China is being severely affected by the outbreak of the devastating coronavirus (COVID-19). The Chinese manufacturing and services sectors plunged to record lows in February, Chinese automobile sales sank a record 80%, and Chinese exports fell 17.2% in January and February. Official data confirm a widespread slowdown in China’s economic activity, a trend that is also visible through informal barometers like low pollution levels and depressed shipping traffic. The country’s economic recovery will be difficult as demand from other countries continues to drop while they attempt to cope with the spread of the virus within their own borders.

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