Corona Virus and its Impact on the World Economy

Written by 
Dr. / ELsayed Awad
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The corona virus outbreak in Wuhan caused concern in financial markets, prompting investors to live on high alert due to the economic implications of its spread.

The Corona virus appeared in the Chinese city of Wuhan last month, affecting hundreds of people around the world.

“The rapid spread of the virus means that there is no longer any doubt that it will disrupt the economy during this quarter,” says Julian Evans-Pritchard, chief economist of China Capital Economics.
The pandemic has brought back memories of the highly contagious SARS virus, which emerged in China and caused global panic in 2003, affecting more than 8,000 people and killing 774 people.
Chinese GDP witnessed many fluctuations from quarter to quarter at the time, as the country suffered a sharp drop in travel and low growth in retail sales in the wake of the outbreak. Despite this, the country’s economy then grew by more than 10%, according to the World Bank, which is a little faster growth than the year before.
However, investors and economic analysts are still worried about the outbreak of the Corona virus, and their concerns may be justified, as Edward Moya, chief market analyst in Oanda, says, “Fears are increasing from the impact of the travel ban significantly on the economy, while some are concerned about the decline in output Chinese GDP at 1% or even more ”in the first quarter of 2020
During the 2020 holiday, the number of Chinese travelers, through various modes of transportation, decreased by 70%, compared to last year, according to Standard and Poor’s. Many international airlines have also suspended flights to parts of China.
Goldman Sachs analysts say the “economic impact (of the virus) may be stronger” than that of the SARS virus. And they lowered their forecast for the growth of the Chinese economy to 4%, compared to 5.6% in the previous forecast for the first quarter of the year.
In Italy, an official in the Italian apparel and fashion industry said that the sector expects a 1.8 percent profit decrease in the first half of this year due to the new Corona, which will affect sales. “The full economic impact cannot be appreciated yet, but we will be lucky if the sector achieves one percent growth this year,” said Carlo Capasa, president of the Italian Fashion Chamber of Commerce.
Danish jewelery maker Pandora warned that business in China had come to a halt. Some of the leading brands also said they closed their stores in China, the world’s largest luxury market, which added to fears that the sector could incur huge sales losses if the disease is not contained quickly.
arik tijari ham limuezam alduwal alearabiati, wahu ma yaeni ‘ana alealam aleurbaa qad yatakabad khasayir aiqtisadiat natijat taetil bed alaitifaqat altijariat.
Italy ranks second directly to France among European countries in sales of luxury goods and has the headquarters of major and famous brands such as Prada, Armani and Moncle. The sector achieved revenues amounting to 90 billion euros last year, representing about five percent of GDP in the third largest economy in the euro area, according to data from the Chamber of Commerce in Fashion in Italy.

On the level of Arab countries, China is an important trading partner for most Arab countries, which means that the Arab world may incur economic losses as a result of the disruption of some trade agreements.

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