ECONOMIC IMPACT OF CORONAVIRUS (COVID 19)

By Petros Piki, CA(Z), MSc, RPA

The World Economy has taken a serious battering from the dreaded coronavirus. Some countries will be left bankrupt or with unsustainable debt as they battle to contain the economic fallout from this Covid19. The economic impact range from Governments, International Organisations like the World Health Organisation, Corporations and even individuals no entity is spared. Some believe the devastation of the virus on other spheres of life like food provision and hunger will be bigger than deaths from the virus itself.

<script async src="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js"></script>
<ins class="adsbygoogle"
     style="display:block; text-align:center;"
     data-ad-layout="in-article"
     data-ad-format="fluid"
     data-ad-client="ca-pub-9909000456991631"
     data-ad-slot="2895459834"></ins>
<script>
     (adsbygoogle = window.adsbygoogle || []).push({});
</script>

There are many risks that affect the markets ranging from stock exchanges, debt markets, commodity markets and general economies. The world has witnessed wars, terrorism, trade wars and other threats like natural disasters but we are currently facing one disease that is causing panic and pandemonium in the financial markets. This blog’s aim is to look at financial impact of the disease to business. The 2019–20 coronavirus outbreak is an ongoing global outbreak of coronavirus disease 2019 (COVID-19) caused by the SARS coronavirus 2 (SARS-CoV-2). The outbreak was first identified in Wuhan, Hubei, China in December 2019.

Dreaded Coronavirus

Coronavirus is a group of RNA viruses that cause a variety of diseases in humans and other animals. An RNA virus is a virus that has RNA as its genetic material. RNA represents ribonucleic acid. This nucleic acid is usually single-stranded RNA but may be double-stranded RNA. According to the World Health Organisation (WHO) Coronaviruses are zoophytic, meaning they are transmitted between animals and people.

 The virus spreads between people in a similar way to influenza, via respiratory droplets from coughing or sneezing. The time between exposure and symptom onset is typically five days, but may range from two to fourteen days. Symptoms are most often fever, cough, and shortness of breath. Complications may include pneumonia and acute respiratory distress syndrome. There is currently no vaccine or specific antiviral treatment, but research is ongoing. Efforts are aimed at managing symptoms and supportive therapy. Recommended preventive measures include hand washing, maintaining distance from other people (particularly those who are sick) and monitoring and self-isolation for fourteen days for people who suspect they are infected.

In China where the virus emerged the country has seen rising risk of growth falling below 6%, In China a growth rate below 6% may result in job losses and dreaded social unrest. The Chinese Government has locked down Wuhan, the capital of Hubei province, People's Republic of China. It is the largest city in Hubei and the most populous city in Central China, with a population of over 11 million, the ninth most populous Chinese city, and one of the nine National Central Cities of China.  

In areas where the virus has hit hard like China and Italy industries have been closed or affected (case in point the Steel Industry of Hubei Province), supermarkets have been shut down and there has been a lot of disruption in the supply chains. One industry of note that has been affected is the Steel Industry largely in Hubei Province in China. The disease is transforming into a global epidemic — with case numbers climbing rapidly in countries as far afield as South Korea, Iran, Italy and the US. It has emerged next door across the Limpopo and Neverlank will be looking at the impact this will have to personal and business finance…

The pension sector has also not been spared by the virus. Pensioners in old people's homes in developed markets like UK, Italy and Spain witnessed some staggering mortality rates. In the pension sector losses have been witnessed in equity investments, debt market investments and even investment in real estate has suffered a lot as most tenants struggle to pay rentals given pervasive lockdown measures implemented by national and local governments. Those who have retired and are about to retire have been hit really hard!

Bog economies have also seen record unemployment benefits claims with the USA witnessing levels not seen since the Great Depression, 26 million unemployed in 5 weeks. This trend is worldwide and countries that were already witnessing shaky economic performance will be more hard hit. Fortunately for some economies they can afford to bail out their people. Poor countries will struggle so much.

This is first of many series on the subject matter …

 Neverlank is an advisory Firm with advisers that are well informed of developments around them enabling them to provide sound advisory services and strategies.

Contact us today for Consulting| Call +263 718 110 832| Email ppiki@neverlank.co.zw

Follow us on twitter, LinkedIn, Facebook and Instagram

Always visit https://www.neverlank.co.zw/ to stay informed

Here for people with dreams!