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Economic Impact of Covid-19

The covid-19 epidemic doubles every week leaving governments across the world flat-footed.
The disease is in 85 countries and territories, up from 50 couple of days ago. Over 95,000 cases and 3,200 deaths have been reported.

The countries which have spotted tens of cases have hundreds more circulating undetected. Iran, South Korea, and Italy are potential exporters of the virus. Pakistan has detected 5 cases yet hundreds having the travel history of Iran are roaming undetected. 159 cases have been registered across 14 states of America – the country having one of the world’s best health facilities. Whenever the epidemic takes hold, containing it involves more paramedics and doctors.

The very first task is to make available manpower and money to the health care centers. China moved some 40,000 health workers to Hubei province to fight the disease. The process may involve retired physicians. Recently, the World Bank made $12bn and the IMF $50bn available for Covid-19. Reportedly, American Congress is allocating some $8.3bn of funding for Covid-19.

To protect people and companies as supply chains disrupt is challenging for the governments. In countries where people can’t afford health services due to poor economic conditions are more vulnerable to the outbreak. The fragile health system of many other countries also increases the risk many folds.

Quarantine is a necessary condition to effectively manage the spread of novel coronavirus but everyone can’t afford to take off from work. People and administration may prefer underreporting the actual number of people with positive Covid-19. As far as the economic impact of Covid-19 is concerned, the World Economic Forum has briefed about statistics.

The 2003 SARS outbreak, which infected about 8,000 people and killed 774, cost the global economy an estimated US$50 billion.

Meanwhile, the 2015 MERS outbreak in South Korea infected 200 people and killed 38, but led to estimated costs of US$8.5 billion. Manufacturing activity in China sank in February to its lowest level since first surveyed in 2004. In the quarter to March, the economy as a whole could shrink for the first time since the death of Mao Zedong.

Disruption in Chinese manufacturing due to Covid-19 has already cost the global value chain some $50bn in exports, according to the estimates of UNCTAD.

Here’s the list of economies that are most affected to date.

  1. EU 🇪🇺 $15.6bn
  2. USA 🇺🇸 $5.8bn
  3. Japan 🇯🇵 $5.2bn
  4. Republic of Korea 🇰🇷 $3.8bn

Academics at the Australian National University suggests that GDP in America and Europe would be 2% lower than it would have been in the absence of a pandemic and perhaps as much as 8% lower if the rate of deaths is many times higher than expected.

“The coronavirus outbreak carries serious risks for the global economy,” says UNCTAD head. “Any manufacturing slowdown in one part of the world has a ripple effect in economic activity globally because of regional and global value chains,” he added.

About Noshin Bashir

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