Coronavirus and the World Economy
The coronavirus has arrived in the most remote place of the World and 203 countries and territories are affected. Namibia has now 14 cases and South Africa 1 320. China reported 304 new cases for the week and slowly the spread of the virus comes to a standstill. Namibia is in its 6th day of a total lockdown and most people work from home. The latest cases and deaths are the following:
Table 1: Coronavirus cases – 27 January – 2 April
|Region/Country||Cases27 Jan||Cases27 Feb||Cases12 Mar||Cases19 Mar||Cases26 Mar||Cases2 Apr|
|China||4 581||78 499||80 796||80 928||81 285||81 589|
|Europe||–||556||29 020||93 292||246 327||490 714|
|Africa||1 005||4 687|
|Rest of the World||–||2 569||23 495||48 862||142 800||373 440|
|Total||4 581||82 183||133 311||223 082||471 417||950 430|
From the middle of March the epicentre of the coronavirus has shifted from China to Europe and currently 51.6% of all reported cases are in Europe. In two weeks’ time one can expect that the US and the rest of the world will be the new epicentre. The US reported already 215 344 cases. Only 0.5% of the reported cases are on the African continent.
Table 2: Coronavirus deaths – 27 January – 2 April
|Region/Country||Deaths27 Jan||Deaths27 Feb||Deaths12 Mar||Deaths19 Mar||Deaths26 Mar||Deaths2 Apr||Death ratio as% of cases|
|China||106||2 747||3 169||3 245||3 287||3 318||4.1%|
|Europe||–||14||1 143||4 201||14 143||34 406||7.0%|
|Rest of the World||–||43||586||1 703||3 837||10 375||2.8%|
|Total||106||2 804||4 898||9 149||21 295||48 276||5.1%|
If the current trend continues the total number of deaths will be around 50 000 in a weeks’ time. Italy and Spain have today about 52% of the number of deaths reported in the whole World.
Africa was out of limelight in the beginning and Egypt reported the first cases. Slowly the coronavirus pandemic is reaching the African continent and all countries reported cases. How is the virus spreading in the SADC region? There are only 1791 cases reported in the SADC region and 23 deaths.
Table 3: Coronavirus cases and deaths in the SADC region – 2 April 2020
|South Africa||1 353||5|
The myth that the coronavirus causes just an ordinary flu and therefore it is not dangerous because worldwide last year 7 million died of pollution, only a few thousand died of the coronavirus – it is just media hype thus. About 22 000 – 50 000 people died of influenza in the USA last year, why the hysteria? This view is wildly held in social media and therefore the difference between influenza and the coronavirus is explained.
|Scientific information available||4 months||More than 100 years|
|Death rate||1.4% – 2.9%||0.1%|
|Virus transmission||2.0 – 3.0%||1.3%|
|Risk of infection||30-70%||8%|
|Prevention||No vaccine yet||Yes|
Source: www.livescience.com and New York Times
The coronavirus is dangerous because we know not enough and what is known is putting the coronavirus in a more dangerous category than influenza.
The real economic costs are spiralling and a World recession has become a reality, much worse than 2009. The World economy will move into a severe recession as the MSCI World Index (below) is signalling. The MSCI World Index consists of the stock exchange performance of 28 countries.
Source: MSCI Index
The MSCI index was at 2401 on 22 February 2020 and closed yesterday at 1781, a fall of 25.9%. Each country in the developed World is announcing stimulus packages and the Dow improved on Tuesday and Wednesday last week after markets were positive about the stimulus package in the US.
The Namibian Government announced yesterday an N$ 8.1 billion stimulus package which includes N$ 800 million in VAT refunds and the settlement of overdue invoices. Those in the informal and formal sector who lost their jobs can claim a grant of N$ 750 for the three week period. The business community welcomed the stimulus package. One can only hope that the lockdown should not need a further extension as the experience was in China and Europe.
Table 3: Selected international commodity prices
|Winners for Namibia|
|Energy: Brent oil||-47.34%||-60.57%|
Source: Trading economics. 2 April 2020
The N$ is currently trading 18.10 to the US Dollar and 19.81 to the Euro.
Compiled by: Rainer Ritter
2 April 2020