Business consequences of coronovirus and risks associated with the Covid-19 pandemic
Average level of losses
The outbreak of the coronavirus Covid-19, apparently, has become the strongest of the factors inhibiting the growth of the global economy. At the beginning of March 2020, the measures that governments of many countries are forced to take to limit the spread of infection would correspond (conditionally) to an increase in customs duties of 0.7% (and the world average tariff would rise to 6.5%) . Losses from coronavirus business on a global scale have already exceeded all losses from the trade war between the US and China in the past 2019.
Losses for exports due to the coronavirus Covid-19 (billion $ US). Sources: International Trade Center, Euler Hermes, Allianz Research
According to the International Chamber of Shipping, the global trade volume has fallen by 350,000 due to the Covid-19 epidemic. containers. The European Commission says that over the last weeks of February, the number of shipments from China fell by 49%. The global drop in the volume of shipping (on average by 20-25%) will negatively affect the financial condition of seaports.
Falling oil prices
The Russian economy is exposed to great risks, not only because of the large volume of trade with China, but also because of an independent fall in oil prices.
Price level for oil needed to ensure a state budget deficit and balance of payments for current operations
Although Russia and the UAE, among other oil exporting countries, can afford sufficiently low prices to maintain a state budget without deficiency, depreciation ruble by 10..15% at the end of 2020 0 probably the most conservative and optimistic forecast.
Coronavirus and the tourism business
The losses of the tourism business are most obvious. In the services sector (travel agencies and related), the potential losses from the Covid-19 coronavirus are highly dependent on the country. Russia is in the TOP 10:
Potential weekly losses in the travel services sector, billion $ US
Trade and business with China
It is believed that the impact of the coronavirus epidemic demand in the commodity trading sector from China and Europe will continue at least until the end of April, and most likely longer. A stronger dollar, lower commodity prices and a drop in demand will lead to a decrease in world trade throughout 2020.
Growth rates world trade in goods (YoY,%). Source: Euler Hermes
Other business sectors
In industries such as textiles, transportation equipment, machinery, and commodities, average inventory levels may continue to rise. long run. However, in other areas with current stock levels below average, there is a risk of a shortage of goods. First of all, we are talking about the electronics industry and the production of computer equipment.