Coronavirus and the World Economy
The coronavirus has arrived in the most remote place of the World and 213 countries and territories are affected. Namibia has now 16 cases and South Africa 12 074. China reported no new deaths for a second week. Namibia emerged with stage 2 out of the lockdown on 5 May as expected. The latest cases and deaths are the following:
Table 1: Coronavirus cases – 27 January – 14 May
|Region/Country||Cases27 Jan||Cases27 Feb||Cases26 Mar||Cases30 Apr||Cases7 May||Cases14 May|
|China||4 581||78 499||81 285||82 862||82 885||82 929|
|Europe||–||556||246 327||1 219 278||1 299 546||1 392 455|
|Africa||1 005||36 703||47 267||70 558|
|North America||74||89 478||1 116 169||1 326 679||1 502 626|
|Rest of the World||–||2 495||53 322||766 572||1 066 574||1 381 555|
|Total||4 581||82 183||471 417||3 221 584||3 822 951||4 430 123|
From the middle of March the epicentre of the coronavirus has shifted from China to Europe and then to the US. Currently 33.9% of all reported cases are in North America and 52% of the total deaths are reported in Europe. The US reported 1 430 348 cases and 85 197 deaths. Only 1.6% of the reported cases and 0.8% of the deaths are on the African continent; however one should keep in mind that testing is not done as expected.
Table 2: Coronavirus deaths – 27 January – 14 May
|Region/Country||Deaths27 Jan||Deaths27 Feb||Deaths26 Mar||Deaths30 Apr||Deaths/7 May||Deaths/14 May|
|China||106||2 747||3 287||4 633||4 633||4 633|
|Europe||–||14||14 143||131 603||143 127||154 344|
|Africa||28||1 557||1 997||2 484|
|North America||–||1 334||64 665||79 039||90 499|
|Rest of the World||–||43||2 503||25 805||36 288||46 220|
|Total||106||2 804||21 295||228 263||265 084||298 180|
 North America is Canada and the US
If the current trend continues the total number of deaths will be around 328 000 in a weeks’ time. The USA, UK, Spain, Italy, France and Belgium have today 71.2% 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 70 558 cases and 2 484 deaths. There are only 15 229 cases reported in the SADC region and 319 deaths.
Table 3: Coronavirus cases and deaths in the SADC region – 2 Apr – 14 May 2020
|SADC country||Cases2 Apr||Cases30 Apr||Cases7 May||Cases14 May||Deaths2 Apr||Deaths30 Apr||Deaths7 May||Deaths14 May|
|South Africa||1 353||5 350||7 808||12 074||5||103||153||219|
|Total||1 791||7 200||10 088||15 229||23||173||230||319|
Graph one below illustrate that the peak has been reached and we are in a declining trend for 7 weeks already.
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 seven 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 four weeks ago.
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 Wednesday at 1998, a fall of 16.9%. The latest forecast by the UN predicts a decline of -3.2% in the World economy and the latest forecast by Oxford economics is a predicted -4.8% contraction for 2020. World stock markets are getting nervous again as the latest economic data indicates that the world is sliding into a deeper recession.
A good indicator for the world economy is the Baltic Dry Index, which measures the cost of shipping goods around the world. The Baltic Dry Index dropped from a peak of 2 505 on 4 September 2019 to a low of 406 on 13 February 2020. The index improved towards the end of March but dropped again to a low level of 398, indicating that the Chinese economy is struggling due to a low in export orders. All indications are that the world economy will get worse and it is clear now that the economic costs of the pandemic outweigh the health costs.
Table 4: Selected international commodity prices
|Winners for Namibia|
|Energy: Brent oil||8.05%||-58.31%|
Source: Trading economics. 14 May 2020
The commodity prices relevant to Namibia reached a turning point four weeks ago and with the weakening exchange rate one can probably see an increase in exports from May onwards.
The N$ is currently trading 18.5 to the US Dollar and 19.98 to the Euro.
Compiled by: Rainer Ritter
14 May 2020