COVID-19 and economy.

Dear Editor,

Novel coronavirus (COVID‐19), which originated from Wuhan, China, has spread to more than 125 countries of the world infecting more than 100 000 population. Apart from being a global health concern, COVID‐19 is having major consequences on the world economy, and experts have predicted that COVID‐19 will lower global gross domestic product growth by one‐half a percentage point for 2020 (from 2.9% to 2.4%). The whole world is now a single global community, where any major happening in one part is bound to have repercussions in rest of the world.

Chinese government, in order to control the spread of the disease, had to close the major production centers and as China being a manufacturing hub, led to disruption in the global supply chain which affected almost all sectors ranging from pharmaceuticals to automobile. The disruption of pharmaceutical industry in China had impact on other countries, where the prices of lifesaving drugs increased due to shortage of raw materials from China. As the Chinese industries had ceased production, the global prices of raw materials like metals fell all over leading to major slowdown in various metal producing economies.

Emulating China, other affected countries also restricted public gatherings and had to shut down schools, large gatherings, sports, and community activities. Most of the countries had their primary infection contracted from people coming from endemic areas and many countries have stopped flight operations and closed borders. People also started avoiding unnecessary travel, leading to large number of flight cancellations causing major losses for the airline companies. There was overall reduction in oil demand, which led to the largest fall in oil prices in the global market since the Gulf war. The rapid fall in oil prices along with the overall reduction in global industrial production caused major fall in the global stock markets with markets falling more than 20% over a short span of time and the risk of a global 2008‐like recession is looming large.2, 4

The longer the virus spreads, the more economic performance will be impacted, raising concerns about the financial sustainability, especially for highly indebted countries. Researchers do not yet have a clear understanding of the virus's behavior, transmission rate, and extent of spread. Coherent and coordinated responses are needed the global policymakers to limit the economic fallout.