As the Coronavirus continues to spread, we are not only seeing an increase in the loss of life but also an increase in the economic impacts of the virus. The lock down of Wuhan, which has now extended to the Hubei province prevents movement of any kind. From transportation of goods and workers to business and other kinds of travel. Due to a fear of the virus many people in these areas have stopped travelling to places where they may get easily infected like: movie theaters, restaurants, shops, and restaurants. The lack of activity has impacted the owners of these businesses heavily, especially since they have to continue to pay bills and employee's salaries. The fact that the health crisis hit during the Lunar New Year break has also negatively impacted the economy due to commercial losses, since people on a break usually go out more and spend.
Some big companies like Starbucks and IKEA have already closed their operations in China.
Several international airlines have stopped offering flights to China and international hotels have been offering people refunds. In essence, there is a growing concern of the devastation that the Coronavirus might continue to have in China. Further, the stock market has dropped about 15% for the past few weeks. It is still early to be able to accurately discern whether the Coronavirus will have devastating effects on the international community. What type economic effects do you think the Coronavirus will continue to have?
https://www.bbc.com/news/business-51386575
7 comments:
I agree that there has been a high degree of economic devastation due to the virus, on top of the lives it has taken. I think that the tourism and travel industries will continue to face a toll in the coming weeks until the virus is contained or eradicated, and this will have a spillover impact on the stock market. Furthermore, other multinationals like Apple are also questioning their decision to produce in China since factories have been shut down, and it is impacting production. Overall, the virus will continue to impact almost all parts of the economy since there is a huge pause in economic activity in China, and the effects are being felt at a Global level.
With the slowdown of economic activity, travel industries are mostly impacted. Coronavirus has powerfully impacted the stock markets too as companies such as Apple depend on Chinese labor market for the production of their products and now the managerial decisions are being made to either slow down the production or find an alternative to keep up consumer confidence.
I agree with the above two comments completely. I don't think the economic magnitude of the coronavirus can be underestimated, and I also believe that Powell should take measures such as lowering interest rates to make sure this doesn't shock the US economy .
I agree as well with the previous statements. I think the U.S. government and economists should step in and make changes in order to avoid a downturn in the U.S. economy. More and more people are afraid to shop at public places, and are taking precautions to protect themselves and their families against what might happen if the virus spreads. Typically, just as during the Great Depression, when people are afraid of something, they tend to spend less, save more, take out money, and invest less. This explains why the stock market has slightly decreased in the last few weeks compared to the last few years. We can only hope that the impact of the Coronavirus does not take have a lasting and drastic effect on the economy and international trade.
I can see how this can be a global epidemic if the virus keep going. People have doubts whether this virus is going to be big or not and this can definitely impact the economy. Yes, some companies have shut down production in China due to the virus and some stocks have been going down. But, I think if the world work together to tackle this virus, it could be better to all of them. I believe The WHO experts are going to land in China this weekend to get more data and workshops to tackle this virus. So, I personally don't think this could have a huge economic impact in the future.
It's no secret that the coronavirus has cause a massive scare worldwide. Right now it has taken a huge negative toll on the economy but, it can be said that just like a controversial scandal, the hysteria surrounding coronavirus won't last for much longer. Unless the virus has infected a massive amount of the US population, I don't expect that its current effects will be long-term.
I believe that not only will the Chinese economy be impacted severely, I think that this outbreak is going to have a major effect of the world economy as well. Like we saw in 2008 when the US economy was experiencing the Great Recession other economies around the world were affected. This happened because of how large and important the US economy was to the world economy. With China being such a large player now we can only expect this to be the case as well.
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