As of 12 March 2020, the novel strain of coronavirus - named COVID-19 by the WHO - has infected 126,258 and caused 4,638 deaths. These figures are likely to increase in the coming days, given the continuing rapid spread of the virus across the world. But leaving aside these grim numbers which place COVID-19 firmly above the SARS and MERS epidemics as a global health emergency, the world has been left reeling in the wake of its economic and business disruption over the past weeks.
According to a forecast by Capital Economics Ltd. COVID-19 is likely to inflict an economic damage totalling USD 280 billion in the first three months - more if it is not curbed by the end of March 2020. It is difficult to assess the damage caused so far - the near-shutdown of human resources across several Chinese cities, many of which are prominent industrial and manufacturing hubs, is indicative of a wide-ranging impact across all business sectors; notably electronics, pharmaceuticals, and the auto industry. China’s position as the largest trader of merchandise in the world juxtaposed with the travel restrictions placed upon it by other countries in order to curb the spread of the virus means that retail outlets across all sectors are likely to face inventory shortages if alternative vendors are not arranged. This is not to mention the downturns in sales and tourism - the scarcity of big-spending Chinese tourists or students knocking on retail doors has certainly caused a pinch in the pockets of bigwigs like Apple, Foxconn and Starbucks.
Business Impact from the Indian Perspective
While it wouldn’t, strictly speaking, be accurate to say that the macroscopic state of affairs has been replicated in India, it wouldn’t be too far from the truth. The country is facing supply chain strains and inventory deficiencies across pharmaceuticals, electronics, mobile phones, automotive spare parts, and industrial components. The sting from tourism has been relatively more modest, as compared to the rest of the world, but the aviation sector has suffered.
(Check out Part II for a more in-depth analysis of COVID-19’s impact on various Indian business sectors)
About the Author :
Mikhil Rialch is a graduate from Leiden University with an MSc. in International Relations and Diplomacy with a keen interest in South Asian Security and Middle Eastern Geopolitics. He works as an analyst at Mitkat Advisor