It cannot be ignored that the surge in coronavirus has put brakes on the steady fast movement of the Chinese economic dream. The virus is expected to have a significant impact on the global economic slowdown, trade, supply chain disruption, commodities, and logistics.
The Chinese economy has decelerated by 1-1.25 percentage points over 2020 because of less production.
Various Chinese cities and provinces are in lockdown mode. China accounts for approximately 19.71% of global GDP at purchasing power parity. Therefore, it is estimated that the global GDP will suffer an impact of around – 0.5%.
As far as trade is concerned, China is the world’s largest exporter and second-largest importer. China accounts for 13% of the world’s total exports and consumes 11% of world’s total imports. The lockdown can strongly impact 500 million people in the country and worldwide consumption of goods.
Along with the harmful effects it can have over China. Globally, the coronavirus outbreak can lead to a rise in what is called non-performing loans of $1.1 trillion, according to Standard and Poors.
Chinese airlines have been forced to ground planes and are expected to lose $12.8bn in revenue.
Globally, the airline industry is set to lose $29bn, according to the International Air Transportation Association (IATA).
Argentina’s economy is expected to contract for the third consecutive year. Inflation is running at more than 50 per cent and the country is in talks with the International Monetary Fund (IMF) to avoid a default on its debt.
Impact of Coronavirus on the Indian Economy:
Coronavirus can cause a lot of impact on the Indian economy in many ways, the dependence of India on China has been huge. Of the top 20 products that India imports from the world, China has a significant share on most of them.
India imports 45% of electronics from China.
Around one-third of machinery and almost two-fifths of organic chemicals that India purchases from the world come from China?
For automotive parts and fertilisers, China’s share in India’s import is more than 25%. Around 65 to 70% of active pharmaceutical ingredients and around 90% of certain mobile phones come from China to India.
Therefore, we can say that due to the current outbreak of coronavirus in China, the import dependence on China will have a significant impact on the Indian industry.
The impact on Coronavirus can be also seen in the global markets when a spree of Stock Market Exchanges tumbled in unison. In India itself the Nifty tumbled 364 points to touch a low of 11,269.80, while the Sensex crashed nearly 1,200 points to 38,551.54, extending the selloff to the sixth day and wiping out investor wealth of about ₹5 lakh crore in minutes.
In the past five sessions, the Sensex has plunged over 1,550 points amid a global rout.
Also Read: Coronavirus outbreak: Here are the safety and readiness tips for you
