The Global Economic Impact of Coronavirus: A First Bloomberg Assessment

ALY SONG/REUTERS
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Health, social cohesion and economy are the main areas that have been severely tested in recent months due to the coronavirus pandemic. Particularly in the field of economics, the issue of concern to analysts worldwide is certainly the impact of COVID -19 on the economies of the world.

According to Bloomberg, we will get a first taste of the damage the coronavirus has caused during this week as world central banks and governments try to alleviate market fears about the impact of the pandemic. PMIs in Europe, the US and Asia will be the first indications of the scale of the financial crisis countries have suffered. At the same time in the US, an analysis by Goldman Sachs showed that unemployment is expected to hit a record high of 2.25 million after shutting down thousands of businesses because of efforts to reduce coronavirus.

But what is the picture of the world economy right now, and what is expected in the near future?

USA and Canada

Thursday’s report on initial jobless applications for this week will be the first to show the depth and breadth of the pandemic in the US labor market, with estimates exceeding 4 million – nearly 20 times more than last year.

In Canada, where half a million people, about 2.5% of the workforce, applied for unemployment benefits last week, consumer confidence data on Monday is likely to be another indication that the country may is already in deep recession.

Asia

After a week of action by central banks, interest has shifted to South Korea’s export data for the first 20 days of March, a barometer for world trade.

Europe, the Middle East and Africa

The euro area economy is set to undergo the worst production decline ever seen in the last two decades, according to Bloomberg Economics. This week’s figures will give a first glimpse of the recession.

The confidence indicators and the original PMI indicators for Germany, France and the euro area as a whole will confirm this unprecedented situation. The UK PMIs will be a compass for Bank of England’s planned decisions on Thursday. Decisions are also awaited from the central banks of Hungary, the Czech Republic and Albania.

In Africa, the Central Bank of Kenya may lower its key interest rate for a third consecutive meeting on Monday. Following the announcement of two stimulus packages in a week, the Nigerian central bank is expected to intervene again. In South Africa, a possible downgrade by Moody’s will cause an even greater problem.

Latin America

Brazil’s quarterly inflation report will provide technical assessments, scenario analysis, and should deal with any changes in the thinking and response mode due to the pandemic.

The central banks of Colombia and Guatemala are expected to cut interest rates for the first time since 2018 and 2017 respectively.

Source: Bloomberg