In addition to killing people, the corona virus has spread to various countries in the global economy, from Southeast Asia, the Middle East to the heart of Europe, and more recently to the United States, Australia and Africa.
The pervasive effects of the coronavirus outbreak on the world economy
The outbreak of coronary heart disease in China has become a deadly toxin for global economic growth, reducing the forecast for global GDP growth for the first quarter of this year as weak as possible.
The travel constraints that have affected the tourism industry and the widespread closure of factories represent a negative supply and demand shock. Global GDP growth forecast for the first quarter of 2020 has halved to 1.3 percent. Which could be the weakest figure since the global financial crisis.
Organization for Economic Co-operation and Development (OCDE) report:
The Organization for Economic Co-operation and Development (OECD) said in its latest report that the global economy will slow sharply in 2020. The International Monetary Fund (IMF) has downgraded its forecast for global GDP while warning of the impact of the coronavirus outbreak on global economic growth this year, and the extent of global economic slowdown is unknown.
According to forecasts, the world economy will practically enter a recession in the coming weeks. However, the severity of the global recession will depend on the limited or widespread spread of the coronavirus.
This new forecast is the lowest index of world economic growth since the financial crisis of 2009-2008.
In China, GDP growth forecast for the quarter rose from 6.3 percent before the outbreak to 1 percent, a major economic shock.
The impact of this shock will certainly be felt both in the countries of the region, which have extensive trade and travel ties with China, and will see a decline in exports to moderate consumer demand, as well as in producing countries, which must deal with slowing Chinese demand and falling prices. Commodities will see their economic growth slow.
The impact of this demand adjustment for the US and Western European economies is projected at 0.25%.
Housing demand is also likely to remain stable in these three months, although lower oil prices will increase home purchasing power.
Oil Economy
Oil markets, on the other hand, are dependent on Chinese demand for oil. Demand for oil was the most important factor in changing its price in 2019.
Reducing demand from the world’s second-largest oil consumer could also have a dramatic impact on the world economy, including Iran. Iran’s total oil and non-oil exports to China are estimated at $ 1.5 billion to $ 2 billion a month. During the last month, the prices of oil, petroleum products, petrochemicals, minerals, raw materials and other Iranian exports to China have fallen by 10 to 20 percent.
The country’s total oil and non-oil exports to China are estimated at $ 1.5 billion to $ 2 billion a month. The decline means that declining exports to China will reduce the country’s foreign exchange earnings by about $ 250 million to $ 500 million a month.
Economic damage The further spread of the virus is significant for the global economy as a whole; But for the Iranian economy, which is struggling with sanctions on the one hand and being blacklisted by the FATF on the other; Whether we like it or not, this effect will be greater.
tourism industry
Corona has a number of tangible and irreversible short-term effects. One of the most important of these effects is on the tourism industry. Undoubtedly, the current crisis reduces the volume of domestic and foreign travel and affects the activities of tourism agencies and all actors in the tourism industry.
There are definitely some medical and medical costs involved. On the other hand, retail will also face severe losses. All this will have short-term but tangible blows to the country’s economy. Undoubtedly, many businesses suffer severely in this situation. Hotels and restaurants across the country are suffering serious financial losses.
Definitely in addition to activities such as tourism and restaurant management, stadiums, cinemas, shopping malls, conferences, exhibitions, beauty salons, hotel management, transportation in various areas of land, rail, air and other things in which communities are formed, the most damage. They will eat from this crisis.
If there is no serious and preventive management, the damage that the corona virus does to the country’s economy and the agricultural sector will be irreparable in the short term.
Agriculture industry
Regarding the agricultural sector, one of the unfavorable consequences of the outbreak of the corona virus is the ban on the export of agricultural and food products.
This issue will deepen if Iran does not comply with the measures to deal with the outbreak of Corona in accordance with international standards, ie more countries will announce an export ban to their country and the ban will be extended.
The loss of export markets in the agricultural sector is one of the negative effects of the outbreak of this disease. Losing consumer confidence in Iran’s export markets regarding the health of Iranian food is a cost that restoring market and consumer confidence is very costly and time consuming.
How timely and fundamental the management and measures of the countries of the world are in preventing the spread of this virus as much as possible can be effective in preventing a crippling economic crisis in the world.
Source: