An epidemiological threat like the new coronavirus, which causes the disease COVID-19, can have very damaging effects on the economy, from interrupting the global supply of goods and making mainstream sectors’ work difficult to carry out to shutting down workers in affected areas, reducing available staff on one hand and slowing demand for products and services on the other.
All of the above is already occurring, and the effects of the coronavirus are already evident in large global industries. Within Asia, there are three countries whose industries dominate a big portion of the global economy: China, Iran, and India.
China has the biggest GDP in Asia, at $13,608b. The country’s main sectors are mining, steel, iron, and textile production. Currently, these industries are all but paralyzed, which affects supply chains all over the world.
Iran depends hugely on the oil industry, which represents 80% of the country’s total exports. The second-largest sector in Iran is textile, and the effects of Covid-19 are already having an impact, with 9,000 cases and 354 deaths.
Finally, India is an Asian country with a recent increase in GDP. The strongest industries in India are dressmaking, textiles and chemical production.
In terms of this last country, the deceleration in its economy is quite serious. Growth has plummeted in the last two years, reaching a six-year low of 4.7% in the last quarter of 2019, according to data reviewed by the national office of statistics.
With the arrival of the coronavirus, thousands of suspected cases have been tested, resulting in 73 confirmed cases of the coronavirus in the country. The main business sectors have seen a reduction in numbers and in yield across all categories.
Due to its nature, the adult leisure industry, in particular, is being hit hard. Demand for experiencing live exoticness with call girls in Chennai or looking for any other service of this nature is beginning to be affected, and it is necessary to take appropriate measures to offer clients safety, transparency, and trust.
This is just one example of how deceleration is occurring in India and is linked to the global economy.
In January, Moody’s Analytics confirmed the possibility of a recession in the US this year between 20% and 35%. Now, it judges the probability to be between 33% and 49%. The 49% estimate comes from a model powered by data from the financial market and as such it incorporates more up-to-date information.
The coronavirus is a shock to supply as well as demand, which will hit the global economy hard, particularly in the US.
It is avoidable, but that depends on public morale and political response. As such, large industries are facing difficult terrain to come in the medium and long term.