The IMF’s managing director is of the view that the full impact of the virus can be ascertained only when it is contained.
The virus, which has killed around 2,000 people, has already made a dent in the business world.
The Hubei province in China, where Wuhan, the epicenter, is located is often called the ‘optics valley’ and houses firms that make components for smartphones and telecoms. According to reports, around 10% of the global smartphone shipments could get impacted. Wuhan’s workforce is a crucial part of the global supply chain for sectors like fashion, pharma, auto, and electronics, among others.
From smartphone manufacturer Apple to car manufacturers like Hyundai and Nissan, the virus’ spread has impacted all their operations. A number of airlines have canceled flights to and from China. If all of this isn’t enough bad news, tourism has dropped too.
To make matters worse, a lot of Chinese factories haven’t opened shops yet, after the Lunar New Year celebrations, thereby leading to a lot of disruption in normal activity.
While ripples are being felt the world over, there really isn’t a number that economists can put on the business impact of Coronavirus. According to Kristalina, during the SARS (Severe Acute Respiratory Syndrome) outbreak in 2002, China’s economy was around 8% of the global economy, but now, it is 19%. This means the business impact of covid-19 could potentially be more severe.
With the situation being very uncertain, businesses world over are concerned about the impact it could cause in their operations and thereby their bottom line. There are also concerns that this could potentially lead to shut down of assembly and supply chain lines across the world due to a lack of China-made components.
All the delay and uncertainty in different sectors have translated to a drop in transportation and logistics too. With supply chains being affected, a lot of last-mile delivery challenges are bound to happen. The reach of the virus is now far and wide, across sectors and countries.
While the world is reeling under the impact of Coronavirus, all one can do is wait and hope that it is contained soon. According to some experts, the lost sales could potentially be made up once the outbreak is contained. Will it also mean a renewed vigor in logistics once the virus is contained? There is no answer, really. All of this is mere speculation. In this interconnected global world, it really is hard to predict effects accurately.
But, one thing is certain, the covid-19 virus will certainly impact businesses around the world. We can only hope for a scenario that isn’t very bleak.
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