Coronavirus continues to spread all over the world and about 84,000 people in at least 56 countries have been infected, and about 2,900 have died.
Even if experts urged people not to panic, in Italy, coronavirus shuts down towns, schools and other public events, including Serie A soccer matches, and the risk for many company’s business is real.
This is a big problem for the countries involved, especially for their economic growth as itcould be affected because the risk of not reaching the targets set at the end of 2019 is real.
According to the Organization for Economic Co-operation and Development (OECD), the GDPs of the countries affected by coronavirus will fall sharply in 2020.
S&P Global Ratings lowered its forecast for China's 2020 GDP growth to 5.0% from the initially projected 5.7%. Most of the outbreak's impact on the Chinese economy will be felt in the first quarter, said Shaun Roache, Asia-Pacific chief economist for S&P Global Ratings. A firm recovery may only take hold in the third quarter.
S&P Global Ratings expects the outbreak to be contained by March. If the number of reported cases peaks in February, the country's economy could grow by 5.5%, but if it peaks in April, GDP growth could come up to only 4.4%.
And what about Italy?
Northern Italy is the current center of the coronavirus outbreak in Europe. Restrictions on travel have been introduced -both in Italy and beyond.The outbreak will have a significant impact on the Italian economy, and likely tip it into recession. Northern Italy is the country’s economic engine, with per capita GDP of approximately €35,000 ($38,000) –compared to the national figure of €28,000 –and a 67% employment rate (against 59% nationwide).
But major trade events such as the Milan Furniture Fair have been canceled or postponed, business trips have been scrapped, and uncertainty is rife. Furthermore, virus-related cancellations are already hitting the country’s tourism industry, which accounts for 14% of GDP.
A we already said, the negative impact on financial markets, tourism and supply chain problems, is the reason of the downward revision of estimates in all G20 economies (with GDP expected to exceed 3 points and reach around2.7).
Though, even if experts keep on revising economic forecasts of the countries involved, the size and duration of the economic shock are still difficult to predict exactly.