Coronavirus has turned the whole world upside down. Today we can safely say that most of the global economies have already been affected by the outbreak of the pandemic and the remaining ones are likely to suffer negative consequences of the global economic slowdown in the near future. Although it’s too early to count losses, it’s already possible to pinpoint which sectors will suffer more than others.
First things first
Let’s start from the country where it all began – China. As you know, one of the main countermeasures in the fight against the spread of the virus was the suspension of production. There’s a reason why many people call China “the factory of the world”. Probably everyone has at least one item with a “MADE IN CHINA” label. As you can imagine, the losses resulting from the above-mentioned suspension were enormous. What’s worse, when the situation seemed to be under control and production resumed in the country, the epidemic became a pandemic. As the virus spread across Europe, North America, and Africa, the demand for Chinese-produced goods automatically dropped. Large import economies such as the United States, South Africa, and Nigeria put up lockdown measures, causing businesses to temporarily shut down as well as a drop in disposable income of consumers. The local Chinese market, due to high degree of uncertainty and a lower propensity to consume, weren’t particularly eager to shop either, causing the manufacturing industries in China to suffer from blows from all sides.
American market affected by COVID
It may seem that the eyes of the entire world are focused on one of the largest global economies and importers, the United States, and the disturbing news coming from there. The information concerns not only the number of illnesses and fatalities but also devastating economic data. At the beginning of May 2020, the unemployment rate in the United States reached 14.7% which is the highest value since the Second World War. And experts estimate that by the end of May the number of unemployed workers in the USA will reach 37 million. Unemployment benefits drain the national budget, which, after all, due to the freezing of the economy, records extremely modest tax revenues. Undoubtedly, the country is about to face the most difficult situation since The Great Depression of the 1930s.
Black gold
When thinking about markets affected by coronavirus, we can’t forget about countries obtaining most of their revenues from oil extraction. This raw material, called black gold, has been recording exceptionally low prices in recent months. Although the current situation results from numerous factors, the coronavirus outbreak definitely hindered oil prices from rising to its pre-pandemic levels. Countries affected by coronavirus are imposing various kinds of travel restrictions which translate directly into a significant drop in demand for this raw material on a global scale. Countries with largest oil reserves will probably need to revise their budgets as extracting black gold may even turn out to be unprofitable in some places.
“Hammer blow” to tourism sector
The broadly understood tourism industry is facing the possibility of bankruptcy. The greater the revenues from tourism, the more given markets are affected by covid. Egypt, for example, is estimated to face losses of over 1 billion dollars a month! Everyone, from owners and employees of hotels and restaurants, to tour operators to people selling souvenirs on stalls, are affected by the current situation. Egypt Independent reports that over 200 thousand people have already lost their jobs due to lack of tourists. And remember that Egypt is just a drop in the ocean when it comes to popular holiday destinations. Mediterranean countries, paradise islands in the Indian Ocean such as Zanzibar, safari destinations like Kenya and Tanzania and many, many others are in similar trouble.
What next?
No one knows how long we’ll be struggling with the pandemic or how long it’ll take to get back to our normal lives. All we can do is to monitor which markets coronavirus is affecting the most. Many economies will have to face a hard time. The situation is also difficult for entrepreneurs, although it could open up new possibilities. It may turn out that profiles of various businesses will need to be modified. Or perhaps it’ll be necessary to introduce new trading solutions. Consumers are already changing their habits as the online retail trade is becoming more and more popular. Businesspeople willing to survive will have to prove their flexibility and ability to quickly adapt to changing conditions in markets affected by COVID.
