PRESTIGE INSTITUTE OF

MANAGEMENT AND RESEARCH,

INDORE

“IMPACT OF CORONA VIRUS ON ECONOMY”

BUSINESS AND ECONOMIC ENVIRONMENT
MBA FT-G II SEM
SUBMITTED TO:- SUBMITTED BY:-
PROF. VANDANA DUBEY AKSHAY TOMAR
 INTRODUCTION
 Corona virus disease 2019 (COVID-19) is an infectious disease caused
by severe acute respiratory syndrome corona virus . The disease was first
identified in December 2019 in Wuhan, the capital of China's Hubei province,
and has since spread globally, resulting in the ongoing 2019–20 corona virus
pandemic. Common symptoms include fever, cough and shortness of breath.
Other symptoms may include fatigue, muscle pain, diarrhea, sore throat, loss of
smell and abdominal pain. While the majority of cases result in mild symptoms,
some progress to viral pneumonia and multi-organ failure. As of 6 April 2020,
more than 1,280,000 cases of have been reported in more than 200 countries and
territories, resulting in more than 70,400 deaths. More than 270,000 people have
recovered.
 INTRODUCTION
The virus is mainly spread during close contact and by small droplets produced
when those infected cough, sneeze or talk. These small droplets may be produced
during breathing, but the virus is not generally airborne. People may also become
infected by touching a contaminated surface and then their face. The virus can
survive on surfaces for up to 72 hours. It is most contagious during the first three
days after onset of symptoms, however it may be possible to spread the virus
before symptoms appear and in later stages of the disease. Recommended
measures to prevent infection include frequent hand washing, social distancing
(maintaining physical distance from others, especially from those with
symptoms), covering coughs and sneezes with a tissue or inner elbow and
keeping unwashed hands away from the face. The use of masks is recommended
for those who suspect they have the virus and their caregivers.
 IMPACT OF COVID-19 ON ECONOMY
 Global shares take a hit
Big shifts in stock markets, where shares in companies are bought and sold, can affect
many investments in pensions or individual savings accounts (ISAs). Investors fear the
spread of the corona virus will destroy economic growth and that government action
may not be enough to stop the decline. In response, central banks in many countries,
including the United Kingdom, have slashed interest rates.
 Travel among hardest hit
The travel industry has been badly damaged, with airlines cutting flights and tourists
cancelling business trips and holidays. Governments around the world have introduced
travel restrictions to try to contain the virus.
 IMPACT OF COVID-19 ON ECONOMY
▸ Consumers stockpiling food
Supermarkets and online delivery services have reported a huge growth in
demand as customers stockpile goods such as toilet paper, rice and orange juice
as the pandemic escalates.
▸ The effects of lockdowns are visible
In order to stop the spread of the Covid-19 outbreak, many countries across the
world have started implementing very tough measures. Countries and world
capital have been put under strict lockdown, bringing a total halt to major
industrial production chains.
IMPACT OF COVID-19 ON ECONOMY
▸ Factories in China slowed down
In China, where the corona virus first appeared, industrial production, sales and
investment all fell in the first two months of the year, compared with the same
period in 2019. China makes up a third of manufacturing globally, and is the
world's largest exporter of goods.
IMPACT OF COVID-19 ON ECONOMY
 Even 'safer' investments hit
When a crisis hits, investors often choose less risky investments. Gold is
traditionally considered a "safe haven" for investment in times of uncertainty.
But even the price of gold tumbled briefly in March, as investors were fearful
about a global recession. Likewise, oil has slumped to prices not seen since
June 2001. Investors fear that the global spread of the virus will further hit the
global economy and demand for oil.
IMPACT OF COVID-19 ON ECONOMY
 Growth set to stagnate
If the economy is growing, that generally means more wealth and more new
jobs. It's measured by looking at the percentage change in gross domestic
product, or the value of goods and services produced, typically over three
months or a year. The world's economy could grow at its slowest rate since
2009 this year due to the corona virus outbreak, according to the Organization
for Economic Cooperation and Development (OECD).
 ASSUMPTIONS
 On the assumption that the epidemic peaks in China in the first quarter of 2020
and outbreaks in other countries prove mild and contained, global growth could
be lowered by around ½ percentage point this year relative to that expected in
the November 2019 Economic Outlook.
 Accordingly, annual global GDP growth is projected to drop to 2.4% in 2020
as a whole, from an already weak 2.9% in 2019, with growth possibly even
being negative in the first quarter of 2020.
 The adverse impact on confidence, financial markets, the travel sector and
disruption to supply chains contributes to the downward revisions in all G20
economies in 2020, particularly ones strongly interconnected to China, such as
Japan, Korea and Australia.
 ASSUMPTIONS
 Provided the effects of the virus outbreak fade as assumed, the impact on
confidence and incomes of well-targeted policy actions in the most exposed
economies could help global GDP growth recover to 3¼ per cent in 2021.
 A longer lasting and more intensive corona virus outbreak, spreading widely
throughout the Asia-Pacific region, Europe and North America, would weaken
prospects considerably. In this event, global growth could drop to 1½ per cent in
2020, half the rate projected prior to the virus outbreak.
‘Beyond Corona virus: The Path To Next Normal’
Governments need to act swiftly and forcefully to overcome the corona virus
and its economic impact:-
 Governments need to ensure effective and well-resourced public health
measures to prevent infection and contagion, and implement well-targeted
policies to support health care systems and workers, and protect the incomes of
vulnerable social groups and businesses during the virus outbreak.
 Supportive macroeconomic policies can help to restore confidence and aid the
recovery of demand as virus outbreaks ease, but cannot offset the immediate
disruptions that result from enforced shutdowns and travel restrictions.
‘Beyond Corona virus: The Path To Next Normal’
 If downside risks materialize, and growth appears set to be much weaker for an
extended period, coordinated multilateral actions to ensure effective health
policies, containment and mitigation measures, support low-income economies,
and jointly raise fiscal spending would be the most effective means of restoring
confidence and supporting incomes.
THANK YOU