Global Economy Loses $126 Billion as a Result of Coronavirus Pandemic
The coronavirus pandemic has brought on devastating consequences all over the world, as well as amplified pre-existing deficiencies. A recent survey conducted by the International Trade Center (ITC) reported that international trade fell throughout all quarters of 2019, only for the coronavirus pandemic to intensify the declines in 2020.
According to the ITC report, exports from China fell by approximately 21% during the month of February 2020 when compared to the same time a year prior. Although China has since slightly recovered, the coronavirus pandemic has went on to cause chaos among other exporting countries. The survey data found that US and European exports declined by 7% and 8%, respectively.
Paired with the coronavirus pandemic and the appreciation of the US dollar, developing countries face even larger obstacles as shutdowns in the EU, China, and the US impair international trade. The three major economies account for approximately 64% of supply chain exports, and 63% of world supply chain imports, making them the forefront of raw material, parts and components imports. Fueled by the coronavirus pandemic, the global disruption in manufacturing inputs has amounted to a loss of at least $126 billion.
As a result of the shutdowns, the ITC projects that African exporters will have their global value chain exports reduced by $2.4 billion, with 70% of the losses being attributed to the temporary disruption of the supply chain with the EU. The report also concluded that more than 55% of small and medium-sized business owners have been affected by the pandemic, with two thirds reporting that the coronavirus has significantly impacted their business.
Information for this briefing was found via the International Trade Center and RT News. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
