Global Economic Fallout as Coronavirus Cases Pass 600,000

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image source credit: economictimes.com

Global Economic Fallout as Coronavirus Cases Pass 600,000

President Trump approved a disaster declaration for Michigan and Massachusetts on Saturday as the number of infections globally topped 600,000 and concerns grew about the financial toll of the pandemic.

The two states now have the fifth- and sixth-most infections, respectively, according to statistics compiled by Johns Hopkins University. The disaster designation, which was also extended to the island territory of Guam, makes local governments eligible for additional federal funding.

The moves come a day after Mr. Trump signed a $2 trillion stimulus plan, the largest economic relief package in history.

The highest number of U.S. cases continues to be in the state of New York, where almost 45,000 people have been infected and 519 have died from the virus as of Friday, state officials said.

The U.S. added more than 15,000 cases of the Covid-19 disease, pushing the total past 104,000 on Saturday, with a surge of cases in New York amid increased testing. The growth outstripped that of Italy and China, the countries with the second- and third-most infections, where confirmed cases stayed around 86,000 and 81,000, respectively, according to data compiled by Johns Hopkins.

As a result, the number of confirmed infections globally has more than doubled over the past week to more than 600,000. The death toll from the pathogen rose to more than 28,000 on Saturday, with roughly one-third of the fatalities in Italy, data from Johns Hopkins showed.

Italy’s death toll from the virus on Friday rose by 919 to 9,134, the highest daily tally on record. Total infections there rose to 86,498, a 7% increase from the previous day.

Overlapping travel bans and lockdowns have hammered businesses and led to millions of job losses, punctuated by a spike in U.S. unemployment claims to more than three million this week and a warning of a deep recession this year in trade bellwether Singapore.

“It is now clear that we have entered a recession as bad or worse than in 2009,” Kristalina Georgieva, managing director of the International Monetary Fund, said Friday. Rising bankruptcies and layoffs could undermine any recovery and do long-lasting damage to the world economy, she said.

The Latest on the Coronavirus

  • Global virus infections pass 600,000; death toll surpasses 28,000
  • Confirmed cases in the U.S. exceed 104,000
  • President Trump approved a disaster declaration for the states of Michigan and Massachusetts
  • IMF Managing Director Kristalina Georgieva said it is clear we have entered a recession as bad or worse than 2009

With the pneumonia-causing virus spreading across the U.S. and Europe, after it was first detected in central China three months ago, governments around the world have ramped up efforts to limit people’s movement and began imposing wide-ranging closures on businesses, restaurants and schools domestically in recent weeks.

Increasingly strict travel bans set up by large countries including the U.S. and China have put a dent in global commerce, complicating efforts to reignite growth.

France and Belgium on Friday extended their national lockdowns by two weeks, until mid-April. French Prime Minister Édouard Philippe said experts advising the government recommended the lockdown remain for at least six weeks. Russia on Friday suspended all passenger flights to and from the country.

The IMF warned that low-income countries will be hit particularly hard given a combination of a health crisis, sudden reversal of capital flows and in some cases a plunge in commodity prices. In Russia, where oil exports account for roughly one-third of government revenue, the ruble has fallen to its lowest level in four years. The IMF estimated that at least $2.5 trillion is needed to contain economic contraction for emerging markets.

The Chinese government is also wrestling with the economic blow from the SARS-like virus, first from a prolonged halt in domestic business activities and now from weaker consumer sentiment and shrinking export demand as the coronavirus engulfs Europe and the U.S.

On Friday, China’s top decision-making body said the government plans to boost spending by increasing its fiscal deficit this year, as well as speed up issuance of Treasury bonds and so-called local government special-purpose bonds to support funding of infrastructure projects, as part of the stimulus measures to curtail economic impact from the pandemic.

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“The fiscal policy needs to be more proactive, and the prudent monetary policy needs to be more flexible,” said a statement from Friday’s meeting of the Politburo Standing Committee, chaired by President Xi Jinping. The government also called for a gradual reopening of shopping malls and markets to boost consumer spending.

China’s National Health Commission reported 54 new infections Friday, saying all were imported from abroad, bringing the total to 81,394.

Other countries continue to tighten rules on social distancing. Iran this week closed shopping centers and banned road travel between cities, pledging to fine and impound the cars of offenders. Iranian officials have warned the population to brace for a second wave of infections. Afghanistan on Friday expanded restrictions by announcing a three-week lockdown on its capital, Kabul. Lebanon, which extended its nationwide lockdown until April 12, on Friday imposed a nighttime curfew.

In Turkey, President Recep Tayyip Erdogan introduced further travel restrictions this weekend to combat the spread of the virus, which has infected 5,698 people and killed 92 in the country, according to a tally by national health authorities. Intercity bus and air traffic will be reduced to a minimum while all international flights will be suspended.

Hong Kong banned public gatherings of four or more people beginning midnight Sunday, with those violating the rules facing fines of more than $3,000 and six months in jail. Singapore said it would fine people who violate its social distancing rules up to about $7,000.

Australia said it would quarantine citizens returning from overseas in hotels for 14 days beginning midnight Saturday.

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