Coronavirus – COVID-19 outbreak causes $50 billion decline in global exports

By The Inspirer staff writer

The impacts of the coronavirus (COVID-19) are being felt along global value chains as manufacturing slows in China, finds a new report by the United Nations Conference on Trade and Development (UNCTAD).

According to information from World Health Organization (WHO), on Friday, March 7, 2020, there were a total of 95,265 reported cases of COVID-19 globally, and 3,281 deaths due to this viral disease which is like pneumonia.

The slowdown of manufacturing in China due to the coronavirus (COVID-19) outbreak is disrupting world trade and could result in a $US50 billion decrease in exports across global value chains, according to estimates published by UNCTAD on 4 March.

In February, the country’s manufacturing Purchasing Manager’s Index (PMI) – a critical production index – fell by about 22 points to 37.5, the lowest reading since 2004. Such a drop in output implies a 2% reduction in exports on an annual basis.

Because China has become the central manufacturing hub of many global business operations, a slowdown in Chinese production has repercussions for any given country depending on how reliant its industries are on Chinese suppliers.

“In addition to grave threats to human life, the coronavirus outbreak carries serious risks for the global economy,” UNCTAD Secretary-General Mukhisa Kituyi said.

“Any slowdown in manufacturing in one part of the world will have a ripple effect in economic activity across the globe because of regional and global value chains.”

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According to UNCTAD estimates, the most affected sectors include precision instruments, machinery, automotive and communication equipment. Among the most affected economies are the European Union ($15.6 billion), the United States ($5.8 billion), Japan ($5.2 billion), The Republic of Korea ($3.8 billion), Taiwan Province of China ($2.6 billion) and Viet Nam ($2.3 billion).

The estimated global effects of COVID-19 are subject to change depending on the containment of the virus and or changes in the sources of supply.

Trade Impact Coronavirus

 Source: UNCTAD

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Elias Hakizimana

Elias Hakizimana, CEO&Founder of The Inspirer Ltd,(www.rwandainspirer.com) is a professional Rwandan Journalist with Bachelor’s Degree in Journalism and Communication, received from University of Rwanda’s College of Arts and Social Sciences (CASS) in 2014. He served various media houses in Rwanda including Rwanda Broadcasting Agency (RBA) in 2013 and became passionate with English Online and Print Media Publications where he exercised his talent as a Freelance News Reporter for The New Times, The Independent, The Rwanda Focus, Panorama and more before he became a Self-Entrepreneur as the CEO and Founder of The Inspirer Limited in early 2017.

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