- London based IHS Markit states that the recent Coronavirus outbreak could have serious threats to the global economy leading to a 0.8 percent depletion in global GDP for the first quarter than the SARS outbreak of 2003.
IHS Markit also added that during the time of the SARS outbreak, China was the world’s sixth-largest economy accounting for a paltry 4.2 percent of the net global GDP. However, the scenario has completely turned as in the current scenario China is the world’s second-largest economy accounting for a 16.3 percent hold in the overall global GDP.
Thus, IHS Markit stated that any “turmoil in the Chinese economic turf can just not send ripples, but can lead to sending shockwaves across the globe.”
The recent Coronavirus outbreak has so far accounted for huge death toll standing at an alarming figure of 650 plus and counting and with 31,161 confirmed cases that have also prompted a dozen of global airlines to cancel their flights to China as authorities strive hard to put breaks on the spread of the deadly virus.
July of 2003, witnessed similar scenes wherein an excess of Eight Thousand people was infected with SARS and the outbreak that claimed at least one out of every ten people dead or diagnosed, thus, proving a higher mortality rate than the current Coronavirus.
The report also stated that if all the latest confinement measures in China is during to stay in place till February end and gets lifted up progressively during the March beginning, the core impact of the virus will get concentrated during the first half of the 2020 and will lead to 0.8 percent depletion in the global GDP for first quarter and 0.5 percent for the second quarter.
“Nevertheless, in many ways, China’s economy is additionally vulnerable these days than it absolutely was in 2003, with productivity and overall economic process already slumping down further and therefore the effects of the US-China trade conflict.”
The eleven Chinese provinces that have proclaimed an extended vacation amount are unremarkably answerable for over 2 thirds of its vehicular production within the country, with a projected crisis-induced first-quarter production loss of around 350,000 units if they’re idled till February 10th.
If this threat situation lingers into the Mid-March period, and plants in adjacent provinces are closed, the China-wide supply chain and logistics disruption caused by shortages of part from Hubei, a significant part hub, might have a wide-reaching impact.
In this state of affairs, IHS Markit predicts potential lost production of quite in excess of 1.7 million units for the first quarter in 2020.