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The novel coronavirus disease (COVID-19) has claimed over 1,800 lives in China alone with more than 72,000 being infected across the world ever since the deadly communicable disease broke out in China’s Wuhan. The COVID-19 death toll has already surpassed that of the SARS outbreak in 2002-03 and the World Health Organisation (WHO) has declared it a global health emergency.
The deadly virus, which has infected people in over 25 countries, has sent a sense of fear in investors across global markets. With international trade getting disrupted and global outlook looking weak amid growing concerns over containing the outbreak of the COVID-19, the impact of the disease can be felt in the Indian economy and markets as well.
The impact of COVID-19 will be significantly felt in China’s economic growth in the near term since the virus originated from there. The Chinese government has tried very hard to contain the disease in Wuhan, the capital of the country’s Hubei province. It has limited the trade and commerce in the city and blocked the movement of the public in the city in a bid to quarantine the infected people, however, this, in turn, has severely affected the trade and commerce in the region, particularly during the country’s annual Lunar New Year celebrations.
A recent report by the Financial Times, that quoted a Deutsche Bank forecast, said that because of coronavirus, China’s economic growth is going to be 1.5 per cent lower in the first quarter of 2020 compared to the same period in 2019, at 4.6 per cent. The global economic growth during the period is expected to be slower by 0.5 percentage points.
The outbreak of coronavirus has triggered a gradual fall in the global stock, commodity and money markets during the past few weeks. Investors are concerned about the damage it will have in the businesses and economy.
Multi-national companies such as PepsiCo, Siemens and Peugeot Citroen have their offices and factories in Wuhan and other parts of Hubei province. There are many companies have suspended their work so as to contain the virus, this, in turn, has affected their businesses and stock prices.