The coronavirus, which was first detected in China, has infected people over 185 countries. Its widespread has left businesses around the World in trouble.
How has Coronavirus affected the economy and the World since the beginning of 2020?
- The global stock market takes a hit. The FTSE, Dow Jones Industrial Average, Nikkei and SP500 have all seen huge falls since the outbreak began at the end of December 2019.
Investors all over the World fear that widespread COVID-19 will destroy economic growth and government actions might not be enough. (1)
- Central Banks in many countries slashed interest rates. In theory, this should make borrowing cheaper and encourage spending to boost the economy. (1)
- More and more people are seeking work. In just two weeks, close to 1M people in the UK applied for benefits. In the United States, the number of people filing for unemployment hit a record high. (1)
- In February the jobless claims in Sweden were 8.2% which is the highest since 2015. In Sweden jobless claims fell to 7.1% in March 2020 from 7.7% in the same month, the previous year. (2)
- Oil prices crashed. The whole World has been shut down and oil prices saw the unprecedented price drop to 0 USD/barrel. In the United States, the price of a barrel of WTI (West Texas Intermediate) turned to negative for the first time in history! (1)
- Risk of recession. The International Monetary Fund (IMF) said that the global economy will shrink by 3% this year. In 2008 the global economy shrank only 0.1% but it brought the World Economy to the brink of collapse. This should put things in perspective. (1)
- The usage of technology has increased. Governments around the World have urged people to work from home if possible. (1) Technology Companies such as Zoom, Netflix, and Amazon have seen a great increase in their stock prices –, especially Zoom.
- Restrictions in traveling. More than 100 countries have travel restrictions because of Coronavirus. In the picture below you can see how drastically the number of daily flights has dropped. (1)
- Car sales in China fell sharply. Over -48% in March 2020.
- Every day we are flooded with negative news related to coronavirus. The pandemic has caused some other effects.Ancillary effects of Coronavirus
- Climate. Research shows that by closing the factories in China in the past 2 months, the sky is almost completely clear again. For example, there is no clothing production, which means that less CO2 emissions are released and people can breathe again. Also, the nitrogen dioxide is less than 30% than normal. (3)
- We consume less. Humans all together consume less plastic, paper, etc. All these aspects contribute in positive ways to the environment. (3)
- Time to re-think financial obligations. Now there is a lot of time to take a deep breath and think. Everyone should re-think their financial obligations in times of crisis. Times like this it is important to have a financial back-up and think about long term goals and objectives and plan in a sustainable way.
- Gold prices have increased. Bank of America has raised an 18-month Gold target to 3000 USD / per ounce, which is more than 50%. Read more: The Fed can’t print gold: Gold to reach 3000 USD, 50% Above Its Record, as per Bank of America