The global economy is grappling with economic fallouts from the deadly spread of coronavirus. Rapid globalisation of trade, travel, education, supply lines and offshoring has made a large proportion of the population extremely susceptible to the effects of the pandemic.
With the severely reduced consumption, supply disruptions and bankruptcies continuing to destroy businesses, travel bans, isolation requirements and financial market shocks have led to a collapse of aggregate demand all around the globe.
According to WHO, the virus has infected more than 2,90,000 people resulting in 12,944 deaths till now and has spread in about 186 countries and territories.
The respiratory disease that originated in Wuhan, China and threw the country into a state of emergency, has infected 81,499 people resulting in more than 3,200 deaths in the country, till date. COVID-19 initiated as an outbreak in China but has now been proclaimed a pandemic by WHO, and as more cases are popping up with countries unable to contain the virus, the talk of “flattening the curve” is rising. This means that there is a dire need to reduce the number of cases so that they occur over a more extended period and not burden our health systems at once.
Governments all over the world are struggling to contain the virus by testing people and tracing contacts in addition to taking measures like social distancing, quarantines, travel bans and restricting mass gatherings.
Not enough new cases in China
Though the Chinese government gained a lot of public rage and criticism for suppressing information about the virus, with proper quarantine and social distancing measures, the country has been able to cut the number of infections significantly. For the first time, on March 19, no new COVID-19 cases were reported. China is now going overseas to European and other countries to help them fight the disease as now it has contained the disease in its home.
Research stepping up
UN health chief announced on 18 March that the first vaccine for COVID-19 is now ready for a trial just 60 days after China communicated the genetic structure of the virus.
China’s CNCBD has claimed that a drug named Favipiravir, which was developed about 25 years ago, has some properties that can treat COVID-19 patients. Favipiravir was developed in Japan by the drug manufacturer Fuji.
In India, Mumbai based Lasa Supergenerics has started working on the development of Favipiravir. Also, French drugmaker Sanofi has collaborated with the US firm Regeneron to see if Sanofi’s drug for arthritis, KEVZARA can treat coronavirus.
In Australia, clinical trials have been started for a drug named Chloroquine which has shown optimistic results in infected humans.
Governments trying different approaches to contain the virus
Governments are passing extraordinary laws to help their citizens fight the pandemic. In the US, Trump assured free coronavirus testing to anyone, including people who are uninsured and signed a bill granting paid leave advantages to Americans.
The UK decided to go against the flow of quarantine and social distancing. The UK Government chose a strategy called herd behaviour, allowing people who will get a mild illness to get immune. The plan was aimed to suppress the virus gradually rather than crushing it completely. However, some test results showed how badly hospitals would be burdened and strain their capacity beyond the breaking point. Hence the UK deviated from the course of herd immunity.
Countries like Italy, France, Spain, Argentina and the US are going for major lockdowns within their country to restrict movement and contain the spread of the disease. Australia also announced the shutdown of non-essential services from March 23 due to rising COVID-19 cases in the country.
CO2 levels falling and solidarity rising
Global air pollution and CO2 levels have gone down significantly since the virus has started to impact work and travel.
People in various countries are coming together and uniting to fight the coronavirus pandemic. In Italy, people have come together to sing songs from their balconies while in Spain, people clapped hands for the nurses, doctors and other healthcare providers who are working hard to take care of the rising number of patients.
Stock Market Rally after the plunge
With the constant rise in the number of coronavirus cases, shares have plunged all around the world to historic lows during past weeks due to mounting fears in investors of slow economic growth and plunge in company profits.
Trillions of dollars have been wiped off from the global equity markets recently.
Dow and S&P 500 that traded at all-time highs in February 2020, plunged to 19,173.98 and 2,304.92 points on March 20. The indices have been sinking, with an attempt to rally on some days but failing, since February 20, 2020. Falling crude prices, strengthening dollar and unprecedented lockdown for New York weighed down the market on March 20, 2020.
The Dow Jones Futures, along with S&P 500 Futures and Nasdaq Futures, hit circuit-breaker on March 18’s pre-market session on coronavirus fears.
The S&P/ASX200, which has been sliding since February 20, with ups and downs, finished at 4816.6 on March 20.
However, The Federal Reserve and major central banks retorted with a range of stimulus measures like interest rate cuts and stimulus packages to bring liquidity and revive their economies which resulted in surging up of the global stock markets.
Dow Futures, Nasdaq Futures and S&P 500 Futures gained sharply on March 20, closing the highly volatile week with a turnaround.
Europe’s FTSE 100 traded about 2% higher on March 20, 2020, due to the rise in energy stocks after oil prices bounced back while Germany’s DAX, South Korea’s KOSPI and Shanghai Composite also traded higher during the day. China’s Shanghai Composite Index has been declining, but the markets in China have suffered the least as compared to global stock markets amid the virus infection.
Asian stocks and European markets closed with gains after central banks including Fed, European Central Bank and Bank of England committed to increasing spending and credit guarantees for the markets.
With a slew of measures being taken by the governments to combat the credit crunch in the economy and support financial markets, the environment is expected to still remain uncertain until COVID-19 spread is contained.
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