Coronavirus and the World Economy
The coronavirus has arrived in the most remote place of the World and 210 countries and territories are affected. Namibia has now 16 cases and South Africa 5 350. China reported that their economy starts to normalize. Namibia is in its 27th day of a total lockdown and this was extended to the 4th of May. It is anticipated that from the 5th of May a gradual opening of the economy wil take place. The latest cases and deaths are the following:
Table 1: Coronavirus cases – 27 January – 30 April
|Region/Country||Cases27 Jan||Cases27 Feb||Cases26 Mar||Cases16 Apr||Cases23 Apr||Cases30 Apr|
|China||4 581||78 499||81 285||82 341||82 798||82 862|
|Europe||–||556||246 327||932 464||1 090 873||1 219 278|
|Africa||1 005||16 825||24 894||36 703|
|North America||74||89 478||672 727||889 282||1 116 169|
|Rest of the World||–||2 495||53 322||380 387||551 178||766 572|
|Total||4 581||82 183||471 417||2 084 744||2 639 025||3 221 584|
From the middle of March the epicentre of the coronavirus has shifted from China to Europe and then to the US. Currently 37.8% of all reported cases are in Europe and 58% of the total deaths. The US reported 1 064 572 cases and 61 669 deaths. Only 1.1% of the reported cases are on the African continent; however one should keep in mind that testing is not done as expected.
Table 2: Coronavirus deaths – 27 January – 30 April
|Region/Country||Deaths27 Jan||Deaths27 Feb||Deaths26 Mar||Deaths23 Apr||Deaths/30 Apr|
|China||106||2 747||3 287||4 632||4 633|
|Europe||–||14||14 143||110 387||131 603|
|Africa||28||1 237||1 557|
|North America||–||1 334||49 655||64 665|
|Rest of the World||–||43||2 503||18 352||25 805|
|Total||106||2 804||21 295||184 263||228 263|
 North America is Canada and the US
If the current trend continues the total number of deaths will be around 270 000 in a weeks’ time. The USA, Spain, Italy, France and the UK have today 71.8% 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 36 703 cases and 1 557 deaths. How is the virus spreading in the SADC region? There are only 7 200 cases reported in the SADC region and 173 deaths.
Table 3: Coronavirus cases and deaths in the SADC region – 2 – 30 April 2020
|SADC country||Cases2 Apr||Cases16 Apr||Cases23 Apr||Cases30 Apr||Deaths2 Apr||Deaths16 Apr||Deaths23 Apr||Deaths30 Apr|
|South Africa||1 353||2 506||3 635||5 350||5||34||65||103|
|Total||1 791||3 472||4 999||7 200||23||78||122||173|
Namibia expects an easing of the lockdown from 5 May with appropriate restrictions.
Graph one below illustrate that the peak has been reached and we are in a declining trend. We will not reach zero cases soon, but we have to manage the risks strictly.
Graph 1: Weekly change of the World’s coronavirus cases and deaths
The graph above depicts the weekly change since beginning of February 2020 in the whole World of reported cases and deaths. There is light at the end of the tunnel and since 2 April a five week decline in the growth of cases and deaths occurred.
Graph 2: COVID 19 cases and deaths in Africa and the rest of the world
Source: Compiled from Worldometers data
From the data which is available one can see that a third wave is not on the way as the WHO predicted two weeks ago.
The real economic costs are spiralling and a World recession has become a reality, much worse than in 2009. Such dramatic economic implication of a lockdown of major economies has never been experienced before and the economic growth projections vary and are updated daily.
China and the United States reported the economic growth figures for the first quarter already and in table 4 below the major economies are listed:
Table 4: Real growth in Q1 of 2020 – major economies
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.
Graph 3: MSCI World Index
Source: MSCI Index
The MSCI index was at 2401 on 22 February 2020 and closed on Tuesday at 2023, a fall of 15.7%. Markets improved since Monday on news that vaccines could be available from September.
Table 4: Selected international commodity prices
|Winners for Namibia|
|Energy: Brent oil||7.92%||-66.00%|
Source: Trading economics. 30 April 2020
The commodity prices relevant to Namibia reached a turning point three weeks ago and with the weakening exchange rate one can probably see an increase in exports from May onwards.
The N$ is currently trading 18.1 to the US Dollar and 19.7 to the Euro. Economic growth can thus come in 2020 from declining imports and increasing exports due to the weakening exchange rate. The latest forecast for 2020 by the Bank of Namibia is -6.9%.
Compiled by: Rainer Ritter
30 April 2020