(Countering New Crown Pneumonia) Economic War "epidemic" record: US and European stock markets plummet, can the global economy sustain it?
China News Service, Beijing, February 28 (Mei Yawen) The new crown pneumonia epidemic has spread to Italy, South Korea, Iran, the United States and other countries and regions. Will the global economy fall into recession under the epidemic?
Data map: neatly arranged containers. Photo by Zhang Lang
Local time on the 27th, the US and European stock markets suffered a plunge. U.S. stocks fell sharply, with the Dow Jones Industrial Average, S & P 500 Index and Nasdaq Index closing down 4.4%, 4.4%, and 4.6%, respectively. Among them, the Nasdaq Index and S & P 500 Index had their largest single day in 8 and a half Drop. European stock markets have also plummeted across the board, with the three major German, British and French stock indexes all dropping more than 3%.
Many international agencies have shown pessimism. The International Monetary Fund President Georgieva said recently that the outbreak has prompted the International Monetary Fund to lower its global growth forecast by 0.1 percentage point. Former Federal Reserve Chairman Yellen also said this week that a new type of coronavirus raging around the world may curb global economic growth and may even lead to a recession in the United States.
Kenneth Rogoff, a former chief economist at the International Monetary Fund and a professor of economics and public policy at Harvard University, said in an interview with a reporter from China News Agency that the probability of the world falling into a severe recession is higher than at any time since the financial crisis.
According to Kenneth Rogoff, if a global economic recession occurs, a series of financial crises will emerge in emerging markets, and policymakers in advanced economies will also be tested. At present, the monetary and fiscal policies of many countries have been quite loose, and European countries, especially Italy, are currently not fully prepared for the economic recession.
Peter Carr, director of the board of directors of the National Financial Association and a professor of finance at the University of Maryland, also told reporters that as the new crown pneumonia epidemic spreads globally, people in more countries will reduce travel and gathering activities, which will harm airlines, hotels, conventions , Sports events, restaurants and other industries, it will take a long time to return to normal, the world economy may fall into recession.
The spread of the new crown pneumonia epidemic has negatively affected many areas of the global economy, especially the tourism, transportation and manufacturing industries.
In terms of tourism, the latest research report of the tourism industry data analysis company ForwardKeys shows that in the second quarter of this year, outbound travel bookings in Northeast Asian countries fell by 17.1% year-on-year. According to data from Spain's "Guide to Advance" travel information company, from January 20 to February 9 this year, bookings for flights from China to Europe decreased by 36.7%, and those to Asia Pacific and the Americas decreased by 58.3% and 64.1%.
In terms of the transportation industry, the International Air Transport Association (IATA) preliminary assessment believes that due to the impact of the epidemic, the annual passenger demand of airlines in the Asia-Pacific region may decline by 13%, and global air passenger demand will decline by 4.7%. In terms of shipping, the Baltic Dry Bulk Index (BDI), known as the global shipping barometer, has fallen sharply and is still relatively low. In addition, according to Lloyd's Ship Daily, the global ocean freight air freight rate increased by 3.2% year-on-year in early January, and rose again by 3.4% year-on-year at the end of January.
Manufacturing is a key area hit by the epidemic. The spread of the new crown pneumonia epidemic has triggered the domino effect in the global manufacturing industry chain. Many large companies are facing the dilemma of broken chains in the production of parts and finished products. Apple's first quarter financial report warned that it would not be able to meet quarterly revenue targets and that late delivery of new products could occur. American electric car giant Tesla also said that delivery of its Model 3 originally scheduled for early February will be delayed.
In addition, economists have their own opinions on the manifestations of economic recovery after the epidemic. Georgieva believes that the new crown pneumonia epidemic may cause a V-shaped reversal of economic development. French Minister of Economy and Finance Lemaire believes that the global economy is also likely to show a sustained L-shaped slowdown.
Huang Tianlei, a researcher at the Peterson Institute for Economic Research in the United States think tank, told a China News Agency that the global economy is unlikely to experience a sustained L-shaped slowdown, because the new crown pneumonia epidemic is only a temporary shock and is unlikely to have a sustained impact on the global economy. With the easing of trade tensions, the momentum of a moderate recovery of the global economy still exists, which may emerge after the crisis of the new crown pneumonia epidemic. "In my opinion, the global economic recovery will be more like a V-shaped or U-shaped recovery. The longer the epidemic lasts, the longer the left half of V or U will be." (End)