Great danger! Virus spilled into the economy

In the global world, viruses are globalizing as well as products, services and technology. What happens in a region is no longer limited there, spreads to other geographies in days or even hours. As such, international trade and markets take their share from this process. The authorities have not yet been able to find the vaccine of the Coronavirus and while trying to prevent panic spread, the negative economic effects of the epidemic are already being discussed.

SHAKING IS GREAT

The cost of the Sars virus in 2002-2003 to the world economy was $ 33 billion. However, the effects and spread of the virus remained limited during the period in question. Moreover, today’s Chinese economy has a much greater power than 2003, and it also has investment and financial ties with hundreds of countries. In other words, the cost of coronavirus is estimated to be much more than Sars. As of yesterday, restrictions and even prohibitions in the trade of goods and raw materials originating from the Far East may come into the agenda within the scope of the measures taken for the virus spread to 27 countries.

EYES ON CHINA EXCHANGE

The coronavirus is now threatening the world economy, which has shrunk with the trade wars between the USA and China for the last 2 years. It is stated that the manufacturing industry, which is likely to experience raw material problems, tourism, which has lost 220 million Chinese visitors, and the total loss in dozens of sectors can reach hundreds of billions of dollars. Chinese state television is concerned about the losses in the stock market that will open on Monday after the 10-day Chinese New Year holiday. The country’s media foresees that 2020 growth figures will decrease from 6.1 percent to 5 percent.

TECHNOLOGY, AUTOMOTIVE AND TEXTILE COMPANIES ALARM

US investment bank JP Morgan dropped the growth forecast for the Chinese economy from 6.0 to 5.6 percent and warned that the demand shock in the markets could turn into a supply shock. According to experts, the 0.4 point decline in growth means a $ 62 billion loss for the country’s national income, which is just the tip of the iceberg.

On the other hand, the news is not very good for the world economy. One of the most important reasons for this is that the investments of the company from many leading sectors such as automotive, technology and textile are in the Far East. The disruption of the production and transportation of some goods and products can also hinder global raw material supply. These developments may cause price increases for producers and ultimately consumers in the near future.

MANUFACTURERS IN THE FAR EAST, LIFE FOR THE GLOBAL GIANTS

The fact that the US and European giant companies are becoming more dependent on the manufacturing centers in the Far East also increases the predictions that the crisis will deepen in the coming months. The contraction in world trade can be seen increasing. There are concerns about the impact of developments such as airline companies stopping their flights, the loss of the global tourism industry, companies such as Toyota and Ford stopping production in China for a while, Starbucks closing nearly 2,000 branches, and food companies stopping production. In addition, Google ordered to work from home for activities in China, while Apple decided to close some of its stores in this country. The decline in China, the second largest economy in the world, with $ 14.1 trillion will affect all the countries of the world.

Yenisafak

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