Coronavirus the most expensive epidemic costing China close to $62 billion
CAPE TOWN – A new report compiled by LearnBonds.com has revealed that the Coronavirus – known to cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS), is projected to be the costliest epidemic since 2000.
Data released by the financial publication on Tuesday indicated that by the first quarter of 2020, the virus was expected to have cost China about $62 billion (R915 billion), an equivalent of 2 percent of the country’s gross domestic product (GDP).
Already the impact on Chinese economic growth prospects has been felt since the virus has led to shutdowns across the country. Based on these calculations the impact on the global GDP might be severe, according to the LearnBonds.com report.
The Coronavirus has unnerved markets across the world. As the week began commodities took a beating on the JSE as Chinese stocks slid after the Chinese stock market opened following the extension of the Lunar New Year on the escalating uncertainties over the Coronavirus.
According to LearnBonds.com, Coronavirus is projected to be the costliest epidemic when compared with other disease outbreaks including Ebola, Swine flu among others. This is despite the fact that previous diseases such as Swine Flu and Ebola had a much higher death toll.
- Ebola which ravaged most parts of Africa led to a loss of $53 billion. The virus has recorded 11,323 deaths and 28,646 infections.
- The Swine flu epidemic which recorded the highest number of casualties at 18,138 resulted in a loss of $50 billion.
- Other epidemics with notable economic consequences include Bird flu ($40 billion), SARS ($40 billion) and MERS ($10 billion).
Generally, the impact of epidemics is severe. Hence the need to contain outbreaks in order to avoid economic shut down within the affected regions.
The report by LearnBonds.com stated that from the sampled epidemics, it was clear that economic implications were severe hence the need for establishing a global mechanism to swiftly handle such outbreaks. “All epidemics have led to shutdowns of airlines, sea routes and borders by some countries as a result of panic.
“Additionally, consumer goods tend to be more expensive in the course of epidemics. Such implications greatly hamper countries’ economic growth.”
ForexTime (FXTM) analysts reported that Asian equities marched higher on Tuesday with US futures in the green, while China’s stocks stabilised on Tuesday morning despite Coronavirus cases topping 20 000 with 425 confirmed deaths.
“The recovery in risk sentiment may be based around official efforts to calm virus fears, China’s central bank pumping 1.2 trillion yuan (R2.5 trillion) into the economy and the unexpected rebound in US manufacturing overnight.
“With China also welcoming assistance from the United States to fight the virus outbreak, this could sweeten appetite towards stock markets in the near term. However, raising fears around the virus spreading further and destabilising the global economy will most likely create obstacles for equity bulls down the road,” said the FXTM analysts.
They said when risk aversion made an unwelcome return, market players would be poised to rush towards safe-haven assets such as the dollar and gold.