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The black claw of the coronavirus in the world economy
Currently, 158 countries around the world are infected with coronavirus. The virus has infected more than 1.5 million people and has so far killed about 6,500 people. The World Health Organization has already identified the coronavirus infection as an epidemic. And since then, the global economic downturn has begun. The world economy has become chaotic due to this virus. Although not every country is infected, the coronavirus has wreaked havoc on the economies of countries. Automotive industry, stock market, tourism industry, oil market; The recession is caused by this virus in everything.
Automobile or automobile industry
China is the largest car market in the world. And Uhan, the city where the corona virus originally originated, is known as the ‘Motor City’. The city has motor plants from major automobile companies such as General Motors, Honda, Nissan, Peugeot Group and Renault. Naturally, the outbreak of the corona virus is having a negative impact on the automotive industry. In the case of Honda alone, 50% of its production is in China. In 2019, Wuhan, the capital of Wuhan, was the fourth largest car market in China, and 2.24 million cars were manufactured in Hubei that year. However, at the beginning of this year, the situation changed completely. Car sales in China fell 92% in the first half of February. It's not just China that has to bear the brunt of this loss.
Other countries still have to resort to China for many important raw materials due to their dominance in the car market. Lack of necessary raw materials and equipment is hurting the production process all over the world. Moreover, if there is an outbreak of any disease, the common people have to struggle to meet their daily needs. It is normal to see a decline in the demand and affordability of luxury items such as cars. For example, a volcanic eruption in Iceland in 2010 had a negative impact on the entire automotive industry. For this reason, there is no guarantee that the situation in the automotive industry will not get worse in the near future. According to China’s Association of Automobile Manufacturers (CAAM), car sales could fall by 10% in the first half of the year and 5% throughout the year.
The stock market
Coronavirus infection is affecting people's physical health as well as the global stock market. All the stock indices are falling like a house of cards in the stock market. Japan's Nikkei index fell 10%, or 1869.03 points, the biggest drop in the country's 30-year stock market history. As of March 11, the US stock market had fallen as much as 5%. Of these, European stock markets, particularly Britain, Germany and France, fell by an average of 6% and Australia by about 7%.
China's Shanghai Composite fell 1.23% to 287.43 points. The Shenzhen component fell 1% to 10,831.13 points and the Shenzhen composite fell 1.076% to 1,798.98 points. China has already made up for some of its losses. However, the coronavirus infection and panic, none of which is over yet. So it is not yet possible to say how much damage will be done to China or other countries or what the next situation will be.
It is to be noted that Bangladesh could not be at ease during the fall of this global stock market. On March 9, the stock market in Dhaka witnessed the biggest fall in memory. The main index of Dhaka Stock Exchange, DSEX, fell by 279 points. According to experts, if this is the case around the world, the global stock market could see a catastrophic decline like in 2008.
According to The World Travel and Tourism Council (WTTC), the jobs of 50 million people involved in the tourism industry are at risk. According to the WTTC, if this trend continues, there will be a 25% decline in the tourism industry by 2020. The number of passengers on Chinese airlines fell by 84.5% last month, cutting revenue by 21 billion yuan (2.35 billion). Not just in China, many tourists are scrapping their travel decisions for fear of infection. Ordinary people are trying to prevent themselves from going out of the country even for emergency work. Again, the government is canceling flights in different countries. Airlines and the people involved are also affected by the cancellation of outbound or outbound flights. The European Union's tourism sector has already seen a deficit of 1 billion euros or 1.1 billion.
Italy's tourism industry is quite good and a large part of the country's income comes from this sector. And with the rise of coronavirus infections in Italy, experts are predicting a catastrophic collapse in the country's tourism industry. It is normal to fear huge losses. But only time will tell how terrible this loss will be. However, experts in the industry say that if the current situation does not improve, there is a risk of a loss of 7.4 billion euros or. 12.5 billion from March to the end of May.
Last month, a carnival in the Italian city of Venice ended two days earlier for fear of an outbreak of the corona virus. Moreover, the biennial fine arts festival will be held in August instead of May. Needless to say, there are a lot of tourists coming to these festivals. As much as there is uncertainty as to whether they will not be present at the moment, the event will be canceled or postponed, and what will happen to the tourists in the future, there is a possibility of loss. Tourism is also being affected in countries where coronavirus infections have not been seen. For example, Egypt. The virus has affected only a few people in Egypt and has affected the entire tourism industry.
Travel to different countries stopped, flights stopped. As a result, global oil demand has declined. However, the oil market is much higher than the demand. Due to these reasons, the market price of oil has dropped by 25%. OPEC and non-OPEC countries are discussing what can be done to increase oil prices. The meeting, held in the Austrian capital Vienna, decided that these countries would reduce crude oil production by 15 million barrels a day. This is 3.6% of the world's total supply. OPEC Plus member Russia was asked to reduce its oil production by 500,000 barrels a day. But Russia did not agree to this, instead thinking of increasing the production of 2 million barrels of oil per day.
Russia is a major supplier of oil to Asia and Europe. On the other hand, Saudi Arabia has always wanted to take over the oil market from Russia. So Saudi Arabia is also reluctant to accept this condition. Saudi Arabia wants to increase oil production by 26 million barrels from April. The UAE is also in favor of increasing oil production. The oil market has been falling sharply since March 13 due to not being able to come to a correct decision or not. Meanwhile, Saudi Arabia is again lowering oil prices, which is making things worse. In a word, the country is going to war over the price of oil. Which is affecting the entire fuel oil market.
The negative effects of coronavirus are slowly seizing all countries. Although some countries have been able to come up with this, it is not possible for everyone. Moreover, the outbreak of this virus is not over yet. So there is no certainty about what the next situation will be like. The global food market has not yet seen a recession. However, the prevalence of any disease often affects the food market. It is unknown at this time what he will do after leaving the post. It is a matter of concern that the market for everything from luxury goods to essentials and necessities is suffering. In addition to protecting everyone from the virus, the world economy should also think about how to protect it from the virus.