Humans have an old enmity with the viruses which have been followed way before our species had modernized. For past centuries the outbreak of several viral infections and diseases had claimed uncountable lives. Recently, global masses are facing a serious threat to their public health from a novel respiratory CORONAVIRUS which has passed from species to infect humans and yet we don’t have any means to combat them. The first report of coronavirus was identified in Wuhan city, China and for now, it has claimed more than 3,000 deaths and 90,000 confirmed infections on the global level and the numbers are still rising.
Commonly known as coronavirus is SARS-CoV-2, belonging to the family of virus SARS-CoV causes the disease COVID-19. The virus appeared to be found in bats then systematically transferred from species to infect humans. The virus transferred from person to person in a way similar to Influenza risks of having severe diseases and complications including pneumonia and acute respiratory distress syndrome. Currently, there is no vaccination or antiviral treatment available and though the development efforts are underways, much still needs to be learned about. Only an individual can take precautions by themselves by washing their hands with soap or sanitize them, and wear a mask whenever they are outside.
This epidemiological threat has disrupted global supply chains, financial markets, business investments, and manufacturing operations. Currently, China is the world’s second-largest economy behind the U.S and makes us 1/3rd of world manufacturing. The massive supply chains created by the decades of massive globalization have created such a huge interconnected network that any fissure in China’s economy could be felt throughout the globe. During the 2003 SARS epidemic, the global economy faced around 0.1% cut in global GDP when China’s economy accounted for about 4% of global GDP and with China commanding 16% of global GDP today is certainly to worsen the global growth if the recent novel epidemic impacts similar to SARS.
The outbreak seems to be creating havoc in several nations as several governments have mandated temporary closure of schools, colleges, and private institutions to slow down the spread of the infection. This doesn’t stop here as it carries economic costs too. For the last few weeks, the global stock exchange markets have seen some of the worst weeks after the global financial crisis of 2008. Major market giants as Apple and Hyundai are among the common names who have suffered tremendously. Hyundai had to stop its production due to not receiving parts usually getting from china and likewise Apple felt the financial crunches too as its components are manufactured there. Even people face unemployment too or the persons who are working jeopardize their job too. Since the global growth is already slow and financial markets with already low-interest rates, the Central Banks and the Government are under immense pressure to counter the economic fallout.
Most of the counties have announced lockdowns to stop the spread of the virus and people are advised to stay at home & not go out. The government has divided all the districts in the three zones – red, green & orange. However, movies, malls & airlines will not operate in any of those. Thanks to lots of online movie streaming sites and the availability of mobile networks, people have lots of options to entertain themselves while being at home. If you are a fan of horror genre, you can watch these horror web series in hindi and enjoy. The Government of India has also put a strong focus towards the supply chain so that We do not face the scarcity of food and necessity items.
Well, the impact doesn’t stop until the damage to the global supply chain. Along with the decline in supply, we have seen a decline in demands, revenue, tourism as well. The fear of potential exposure to the virus has caused people to buy less of some of the products, less traveling, etc. The heightened sense of policy uncertainty and unknown risks to the global economy has caused fear among the investors too as they are looking forward to the safer investment treasuries. The bond prices with their maturity and rates are reflecting a higher possibility and risk of a recession. There is an urgent need for Governments to engage in the investment to the key areas of the economy to boost economic activity and minimize the disruption of supply chain and financial sectors.