At this time the world economy has the potential to slow down due to the the outbreak of coronavirus.
Wuhan, the capital of Hubei Province, People's Republic of China, was suddenly famous throughout the world. In the city of 9 million people, the first corona virus attack (Covid-19) began. The virus that was thought to have originated from the animal then became an epidemic that claimed thousands of lives. Not only in mainland China, the corona virus has also spread to 108 countries until March 2020.
Not just this time, the corona virus shocked the world. In 2003, the virus was once epidemic with the name Severe Acute Respiratory Syndrome (SARS-CoV) which also began in China. The initial transmission was thought to be from mongoose animals and infected the first 1,000 people in 130 days.
Differences in Covid-19, MERS, and SARS
| Difference | Covid-19 | MERS-CoV | SARS-CoV |
|---|---|---|---|
| Year | 2019 | 2012 | 2003 |
| First place of identification | China | Saudi Arabia | China |
| Sources of viruses (animals) | Not yet known | Camel | Mongoose |
| Virus speed (per first 1,000 people infected) | 48 days | 903 days | 130 days |
Then corona virus with another type also appeared in the Middle East in 2012. The virus is known as Middle East Respiratory Syndrome (MERS-CoV) which is suspected to spread through camels. Meanwhile, the Covid-19 outbreak has caused global concern. This is due to the rapid spread of the virus, which only takes 48 days to infect the first 1,000 people. No doubt a number of countries made a number of efforts to isolate the spread of the virus. A number of countries are taking steps to prevent the entry of viruses that cause pneumonia and fever.
Corona Virus Affects the Chinese Economy
Wuhan is one of the economic centers in China. Based on the data, the city's gross domestic product (GDP) reached 1.48 trillion yuan in 2018. That number reached 1.6 percent of China's total GDP of 90.03 trillion yuan. With this amount of GDP, Wuhan is among the top 10 cities with the largest economy in China.
Global Economy Predicted to Decline
As the country with the second largest economy, the decline of the Chinese economy will have an impact on the global economy in 2020. This can be seen from the projections made by a number of institutions. EIU lowered its global economic growth target from 2.3 percent to 2.2 percent. While the World Bank estimates economic growth of 2.4 percent, down from the previous estimate of 2.5 percent.
10 Countries with the Largest GDP 2018
| Countries | US$ Trillion |
|---|---|
| USA | 20.54 |
| CN | 13.61 |
| JP | 4,97 |
| GMN | 3.95 |
| ENG | 2.86 |
| FRC | 2.78 |
| INDIA | 2.72 |
| ITA | 2.08 |
| BRZ | 1.87 |
| CAN | 1.71 |
Moody's Analytics research institute in the report "Coronavirus: The Global Economic Threat" (2020) projects, China's economic growth in the first quarter of 2020 (yoy) eroded by up to 2 percent. Meanwhile, every 1 percent decrease in the country's GDP will reduce the world economy by 0.4 percent. According to the report, the Asian region would be the most disadvantaged. The short-term impact has also been seen in the tourism sector. A number of countries that have temporarily suspended flights and shipping to and from China have recorded a decline in tourist arrivals, such as Thailand, Japan and Vietnam. In Macau, quoting Bloomberg , the number even dropped to 83 percent during the Chinese New Year holiday.
Corona Virus Triggers Global Economic Recession
The corona virus outbreak has sparked extraordinary fears of investors in the financial markets. This pandemic can bring the world into the brink of economic recession.
Launching CNN Business, signs of a global recession look like Italy's decision to set most cities in the north including its financial capital, Milan, on a semi-lockdown status. Another thing that supports the recession is the increase in outbreaks in the United States and falling oil prices.
Economists were forced to make corrections to their predictions of the global economy. Calculated how big the impact of the spread of the virus on economic growth. Most believe there is a contraction in the first and second quarter of this year.
The economics at PIMCO, Joachim Fels, assess the possibility of a recession in the United States and Europe. While Japan is most likely currently experiencing a recession.