ImpactofCovid19onGlobalEconomy PDF

Impact of Covid-19 on Global Economy April 10, 2020
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Mercurius Advisory Services Page 1
Contents
COVID- 19 Growth & Worldwide cases......................................................................................................... 3

Lockdowns across the world ......................................................................................................................... 6
Measures against Corona ............................................................................................................................. 9
Economic impact ......................................................................................................................................... 12
USA .......................................................................................................................................................... 13
United Kingdom ...................................................................................................................................... 15
China ....................................................................................................................................................... 16
India ........................................................................................................................................................ 17
Recovery...................................................................................................................................................... 19
Situation update...................................................................................................................................... 21
WHO Country Office for India ................................................................................................................. 22
Conclusion ................................................................................................................................................... 22
Bibliography ................................................................................................................................................ 23
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COVID- 19 Growth & Worldwide cases
Coronaviruses are a group of related viruses Organization (WHO) later renamed SARS-CoV-
that cause diseases in mammals and birds. In 2 by the International Committee on Taxonomy
humans, coronaviruses cause respiratory tract of Viruses. Some researchers have suggested
infections that can range from mild to lethal. the Huanan Seafood Wholesale Market may not
Mild illnesses include some cases of the be the original source of viral transmission to
common cold (which has other possible causes, humans. On March 03, 2020 world health
predominantly rhinoviruses), while more lethal organization declared COVID-19 a pandemic.
varieties can cause SARS, MERS, and COVID-19.
As of April 09, 2020 (15:17 GMT) there have
Symptoms in other species vary: in chickens,
been 1,539,443 confirmed cases and 90,011
they cause an upper respiratory tract disease,
deaths from the coronavirus COVID-19
while in cows and pigs they cause diarrhea.
outbreak. A day before there were 1,447,767
There are yet to be vaccines or antiviral drugs to
confirmed cases and 83,401 deaths from the
prevent or treat human coronavirus infections.
coronavirus COVID-19 outbreak as of April 08,
In December 2019, a pneumonia outbreak was 2020. It can be seen that there has been
reported in Wuhan, China. On 31 December significant increase in the number of cases and
2019, the outbreak was traced to a novel strain deaths. Below is a chart which shows a striking
of coronavirus, which was given the interim jump in the number of cases from March. 2020.
name 2019-nCoV by the World Health Following image shows a spike in total number
of cases worldwide:
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Below is a chart showing increase in number of infected in one day of other countries and China:
1600000
1457578
1365965
1400000
1200000
1000000
800000
600000
400000
200000
80802 81865
0
08 April 2020 09 April 2020
Other countries China
The diagram below shows country wise numbers and percentage of infected as of April 09, 2020:
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Total number of cases

1,600,000
Total number of
cases, 1,433,638
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
Following is a table which shows the total 2-Mar 90443 9%

number of cases and the percentage change in
the number of cases 6-Mar 102050 13%
Date Total number of cases Rate of 10-Mar 118948 17%

worldwide change
14-Mar 156475 32%
22-Jan 580 0%
18-Mar 218840 40%
26-Jan 2800 383%
22-Mar 337586 54%
30-Jan 9823 251%
26-Mar 532465 58%
3-Feb 20630 110%
30-Mar 785828 48%
7-Feb 34876 69%
3-Apr 1118414 42%
11-Feb 45134 29%
7-Apr 1433638 28%
15-Feb 69197 53%
19-Feb 75700 9% As in the above table it can clearly be seen that

the rate of increase in the number of infected is
23-Feb 79205 5% reducing gradually. However, the numbers of
case are still increasing though at a decreasing
27-Feb 83112 5% rate. Governments are taking measure to
prevent the spread most common measure
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taken being the social distancing and use of of Covid-19 and over 12,285 deaths as of 23:00
sanitizers and masks. on 7 April. The lockdown is far from complete,
with California issuing the first order for citizens
Lockdowns across the World to avoid non-essential outdoor activities in mid-
World leaders who have been stricken or forced March, but major cities and potential hotspots
into isolation are still grappling for ways to deal have issued a stay at home order. Chicago, the
with a crisis that will have economic and social third-most populated US city, issued an
shockwaves unseen since World War II. The effective lockdown as of Saturday, March 21st
at 5pm CT until further notice, while also closing
lockdown measures have confined more than
all public facilities. However, there is no
two-fifths of the globe’s population to their national policy on lockdown as yet, leaving
homes. many US citizens free to travel across states,
potentially from hotspot areas to ones as yet
Lockdown in USA largely unaffected by Covid-19.
The lockdowns implemented were aimed at
halting the spread of the coronavirus extended
worldwide and new waves of U.S. outbreaks
pushed the nation’s containment efforts to the
brink. Moscow and Lagos joined the call of cities
around the globe with eerily empty streets,
while Virginia, Maryland and Kansas became
the latest U.S. States to announce emergency
stay-at-home orders. The capital city
Washington followed the suit. In a symbol of
the scale of the challenge facing humanity, a
U.S. military medical ship sailed into New York
to relieve the pressure on overwhelmed Several states have already ordered businesses,
hospitals bracing for the peak of the pandemic. schools, and workplaces to close and enforced
In the US, where about 40% of the population is social distancing by limiting public gatherings,
under restrictions, laws were enacted making it with California, Illinois, Indiana, Michigan, Ohio,
a crime to stockpile medical supplies. The USA is Washington, West Virginia and Wisconsin
handling a huge number of coronavirus cases as adopting the most comprehensive policies
the global pandemic descends on the by mandatory statewide quarantine.
country, with New York in particular
Other, less-affected states such as Mississippi
experiencing huge numbers of cases and
and Oklahoma have closed schools but have yet
deaths, which topped 4,000 on 7 April. Many
to impose any other restrictions. The vast
states have taken preventive measues but a
majority of US states have reduced the size of
nationwide lock down is almost impossible for
permitted public gatherings to 10 people. Only
Washington to impose due to the autonomous
Nebraska and California have yet to close all
nature of the country's federalist state system.
schools completely.
The administration of President Donald Trump
Lockdown in UK
estimated that there will be between 100,000
In a televised address to the nation on March
and 200,000 deaths as a result of the Covid-19
23, Prime Minister Boris Johnson announced
pandemic. Dr. Anthony Fauci and Dr. Deborah
unprecedented limits on where and how people
Birx, of the White House's Coronavirus Task
can meet and gather during the
Force, made the grim forecast during the daily
continuing coronavirus crisis. The measures
presidential briefing on 31 March, but added
introduced are some of the most draconian the
that mitigation measures in place have
UK has ever faced and have resulted in a huge
prevented a far larger outbreak in the US,
shift in how people behave.
where there are were 386,817 confirmed cases
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During his speech, Johnson described the In addition, all weddings have been cancelled.
spread of coronavirus as a “national Prisons have been put on lockdown with
emergency” but avoided directly using the word external visits being cancelled. Funerals are still
lockdown. As of April 9, Public Health England allowed to take place but they should be limited
data shows there have been have been 65,077 to a person's immediate family. This includes
cases of Covid-19 confirmed in the UK, with spouses and partners, parents or carers, plus
7,978 deaths being recorded in hospitals. siblings and children. Where a grandparent has
died, grandchildren can attend and if a person
Britain became the last country to enter does not have any relatives, a close friend may
lockdown, after bans on movement came into attend. In all instances, the government says,
force. The measures also include strict limits on funerals should follow the two metre social
gatherings and even exercise. Non-essential distancing guidelines. While ministers and their
shops, playgrounds, libraries and other venues medical advisers refuse to be drawn on an exit
were also closed. PM B. Johnson warned people strategy from the UK lockdown, discussions are
would only be allowed outside to buy food or under way in Whitehall to explore how a
medication, exercise alone once a day, or to graduated return to work could soften the
travel to work if absolutely necessary. “You economic blow while avoiding an upsurge in
must stay at home,” he said. deaths from the virus.
Lockdown in Japan
Japan is gambling that it can control the spread
of coronavirus without a full lockdown. The
prime minister’s declaration will give governors
in seven prefectures the power to request
business closures to increase social distancing
as number of coronavirus cases in Japan rise to
more than 4,000 nationwide. But the closures
are not compulsory for everybody and many
shops, restaurants and factories will be allowed
When people do leave their homes for exercise
to stay open to keep the economy ticking over,
or any other of the government's acceptable
raising questions about how effective the new
reasons, they have been told to follow social
measures will be. PM pledged ¥39tn ($357bn)
distancing guidelines. This means keeping two
package of public support equivalent to about 7
metres away from others at all times. As a
per cent of annual economic output. The state
result of the lockdown, gatherings of more than
of emergency initially was applied to seven
two people are not allowed, unless they are
urban cities that make up about half of Japan’s
from the same household. This includes family
economy the cities being Tokyo, Kanagawa,
members who do not live in the same house.
Saitama, Chiba, Osaka, Hyogo and Fukuoka but
People have also been told they should not visit
government officials said the list might expand.
friends in their homes, or allow people to come
Mr Abe’s experiment will be closely watched by
and visit them. Parks in the UK have been kept
other nations because it will test whether a
open but the government recommends that
country can control Covid-19 without a full
these are only used for exercise. The
lockdown, despite having a significant number
Department for Environment has issued extra
of cases and no mass testing for coronavirus.
advice saying people should "stay local and use
open spaces near to your home" and not "travel Japan has conducted about 45,000 tests for the
unnecessarily". This comes after people were virus, far less than South Korea, which has
found travelling to the countryside to exercise. administered about almost half a million tests.
The statutory instrument does not say where The Tokyo government requested the closure of
exercise has to take place. gyms, theatres, cinemas, cram schools, karaoke
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boxes, museums, libraries, department stores, As testing has ramped up, the true picture is
shopping centres, bars and night clubs, among emerging. The virus is beginning to spread
other businesses. Even with only a partial through dense communities and new clusters of
lockdown, the state of emergency is expected infection are being reported every day. Lifting
to hit Japan’s economy hard, prompting The PM the lockdown could easily risk triggering a fresh
launched Japan’s largest stimulus package ever wave of infections. The restrictions came into
amounting to about 20 per cent of GDP. The force at midnight local time (18:30 GMT) and
government decided to make direct cash will be enforced for 21 days i.e. upto 14th April
payments of ¥300,000 to households that have 2020.
lost income in the crisis. “This will be one of the
largest economic support packages worldwide, A harsh lockdown is certain to slow down the
with a record level of financing support, ¥26tn disease. Many experts are of the opinion that
in deferred social security payments for the first India is still at an early stage of the infection the
time in this country, ¥6tn in direct cash country still doesn't have enough data on the
distributions and an unprecedented overall transmissibility of the virus or even how many
scale of ¥39tn in public spending,” said Mr Abe. people could have been infected and recovered
to develop adequate herd immunity. An
estimated 1.3 billion people have been ordered
to remain at home as governments take
extreme measures to protect their populations.
Not surprisingly, the lockdown is already

hurting the economy. Mumbai, India's financial
capital and Maharashtra's main city, accounts
for more than a third of overall tax collection.
The densely populated city has reported more
than 500 cases and 45 deaths, and numbers are
Essential activities and facilities, including steadily rising. Authorities say the infection is
banks, grocery stores, postal services, now spreading through the community.
pharmacies and utility companies remain open. Mumbai has made wearing face masks
Some retail stores and entertainment venues mandatory. The services industry, which
such as movie theaters, concert halls and generates almost half of India's GDP, is also
amusement parks can be asked to shut down. likely to remain shut for some more time.
Public schools in Tokyo and some neighboring Construction, which employs a bulk of migrant
prefectures already are closed until early May. workers, will remain similarly suspended. The
Residents can be out for purposes considered unemployment rate may have already climbed
essential, including work, hospital visits and to more than 20% after the lockdown,
grocery shopping, according to a Cabinet Office according to a report by the Center for
statement. Residents in designated areas can Monitoring Indian Economy.
still go out for a walk, a jog or other individual
exercise outdoors for the sake of good health. For the moment, economists say, the
government will have to prioritise farming over
Lockdown in India everything else to ensure the livelihoods of
millions and secure the country's future food
On 24 March, India shut its $2.9 trillion
supplies.
economy, closing its businesses and issuing
strict stay-at-home orders to more than a billion Half of India's labour force work on farms. The
people. Air, road and rail transport systems lockdown happened at a time when a bumper
were suspended. Now, more than two months winter crop had to be harvested and sold, and
after the first case of Covid-19 was detected in the rain-fed summer crop had to be sowed. The
India, more than 6,000 people have tested immediate challenge is to harvest and market
positive and more than 180 people have died.
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the first crop, and secures the second. Moving Relief package
trucks to pick up produce and take them to The Indian government announced a $22.6bn
markets, with adequate social distancing and stimulus package to aid the poor who are
hand washing will be something the affected by the coronavirus outbreak. The
government will have to move on quickly. government also plans to provide wheat, rice
and pulses free of cost to approximately 800
It is going to be tougher for India with its vast low-income families over the next three
size, densely packed population and enfeebled months. Further, cooking-gas cylinders will be
public health system. Also, no country in the provided to 83 million poor families and a
world possibly has so much inter-state $13.31 cash-transfer will be provided to 30
migration of casual workers, who are the million senior citizens. The government will
backbone of the services and construction provide $6.65 per month to approximately 200
industries. million poor women for three months. Medical
insurance worth five million rupees ($66,000)
will be provided for healthcare workers
including doctors, nurses and paramedics.
Government on April 09, 2020 sanctioned

INR15,000 crore to strengthen the fight against
the Covid-19 virus. The amount is said to be
released towards the 'India Covid-19 Emergency
Response and Health System Preparedness
Package'. Out of the total amount INR7,774
crore is to be utilized for emergency response
and the rest will be for medium-term support
for a period of 1-4 years. It will be provided
Measures against Corona under a "mission-mode" approach.
The Indian government announced number of
The key objective of the package is to fund
preventive measures to prevent the entry and
dedicated treatment facilities, centralised
spread of coronavirus. A control room
procurement of essential medical equipment,
operational 24×7 to address queries had been
and drugs required for treatment of infected
launched. India’s Prime Minister Narendra Modi
patients. The government had earlier
appealed to Indians to avoid mass gatherings.
announced a relief package of INR1.7 lakh crore
He requested all citizens to observe a nation-
to help citizens most affected by the novel
wide curfew or janta curfew on 22 March from
coronavirus outbreak. Meanwhile, India has
7 am to 9 pm. People were urged to not leave
also started rigorous testing and a total of 223
the house on that day unless for emergencies.
labs are engaged in the process.
The citizen curfew was a precursor to the
nation-wide lock-down announced on 26 Evacuation measures
March. The Indian government arranged for the
Nation-wide lock-down evacuation of 324 Indian citizens from Wuhan
in a special Air India flight on 31 January 2020.
A 21-day lock-down across the country was
The passengers were placed under quarantine
imposed from 26 March to 14 April to curb the
for a period of 14 days.
spread of the coronavirus pandemic.
The second batch of 330 passengers, including
All factories, schools, colleges, offices and
seven citizens of Maldives was evacuated by the
transportation services have been closed, while
government, arrived from Wuhan on 01
essential services such as supermarkets, and
February 2020. The repatriated passengers are
pharmacies remains open.
currently being monitored. India evacuated 654
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people including 647 Indians citizens by 11 However, the cancellation is not applicable to
February. diplomats, officials of the international bodies,
OCI cardholders and aircrew although medical
The health condition of all of them was screening is mandatory for all. Medical
monitored on a daily basis. They were tested screening and submission of self-declaration
twice for COVID-19 infection and found to be form including travel history for all passengers
negative. All the people who were evacuated arriving from the restricted countries are also
were discharged on 18 February. mandatory.
A total of 76 Indian nationals and 36 foreign India suspended issuing visas to citizens of
nationals were evacuated in a special flight France, Spain and Germany until further notice.
from Wuhan on 26 February. They were placed Such restrictions were already in place for
under quarantine in Manesar and were tested citizens of China, Italy, Iran, Japan and South
negative in the first test. Korea - the five countries worst hit by the
outbreak of the virus. National airline Air India
The third evacuation flight sent by India was to
said on Wednesday it was suspending flights to
Wuhan. India also provided 15 tonnes of
Italy and South Korea until March 28 and March
medical assistance comprising masks, gloves
25 respectively.
and other emergency medical equipment to
China through the same Indian Air Force flight. India has also closed a border with neighboring
Myanmar to counter the outbreak, as countries
Cancellation of Visas and travel restriction
across South Asia reported a rise in cases.
India announced the cancellation of existing e-
visas issued to all foreign nationals of China, on The Indian government had earlier issued a
05 February and advised Indians to avoid travel advisory on 17 January 2020 to the
travelling to China. Further, announcement was general public to refrain from travelling to China
made that people who travelled to China would and avoid contact with anyone with travel
be quarantined upon return. India temporarily history to China since 15 January 2020.
suspended visa on arrival for Japanese and
South Korean nationals on 27 February. The government had also temporarily
suspended e-Visa facility for Chinese passport
holders and noted that already issued e-Visas
are temporarily invalid. Online application for a
physical visa from China was also disabled.
The Indian government is expected to extend

visa cancellations to more countries with the
fresh cases reported in Maharashtra, Delhi and
Bangalore
Availability of coronavirus drugs

On 03 March, India announced the suspension The Department of Pharmaceuticals has
of all visas issued to nationals of Italy, Iran, assessed the availability of drugs in the country
South Korea and Japan who have not yet due to the increase in cases of coronavirus
entered the country. Visas issued to foreign infection. A report submitted by a committee
nationals who travelled to China, Iran, Italy, formed by the department revealed that the
South Korea and Japan who have not yet existing stock of
entered the country have also been cancelled. active pharmaceutical ingredients (API) will be
sufficient to manufacture drugs for two to three Authority and Drugs Controller General of India
month. Various government organisations have been instructed to ensure an adequate
including the National Pharmaceutical Pricing supply of APIs and check black-marketing or
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illegal hoarding. The organisations have also 645 evacuees from Wuhan tested negative.
been asked to monitor the availability of APIs
and drugs. As the COVID-19 pandemic widens
across the world, there has been a increase in
demand of an anti-malarial and anti-
inflammatory drug called hydroxychloroquine.
U.S. president Donald Trump referred it as “one
of the biggest game changers in the history of
medicine” and a treatment for the coronavirus
despite inconclusive scientific evidence. India,
which manufactures 70% of the world's supply
of hydroxychloroquine, banned its export on
March 25. But after Trump called Indian Prime
Minister Narendra Modi requesting for supplies, Two quarantine centres have been set-up to
the ban was reversed. The U.S., which has isolate any passengers showing symptoms of
reported more than 430,000 COVID-19 cases the infection. One centre is located at Manesar,
and over 14,000 deaths, has bought 29 million Haryana, and is managed by Armed Forces
doses of hydroxychloroquine. Meanwhile, India Medical Services, while the second is located at
has reported almost 6,000 cases and more than Chawla Camp in New Delhi and is managed by
170 deaths. Two Indian pharmaceutical Indo-Tibetan Border Police (ITBP). A total of 406
companies, Zydus Cadila and Ipca Laboratories, evacuees who were quarantined at the ITBP
are ramping up production to meet the sudden facility were discharged and allowed to return
surge in demand. Shares of Zydus Cadila and home on 19 February. By 14 March, India
Ipca Labs, both listed in India, are up by 40% screened approximately 1.2 million visitors.
and 29%, respectively, since March 27.
A total of 1,44,910 samples from 1,30,792
Meanwhile, the Indian government was also individuals have been tested as on 09 April
working on creating a reserve to meet domestic 2020, 9 PM IST. 5705 individuals have been
needs. Both Zydus Cadila and Ipca Labs have confirmed positive among suspected cases and
been working to meet the requirements of the contacts of known positive cases in India. On 09
Indian government. However, the government April 2020, till 9 PM IST, 16,002 samples were
had assured the sufficient availability of the reported and out of which, 320 were positive
drug for domestic use. for SARS-CoV-2.
Coronavirus screening, testing Labs testing for coronavirus in India

Starting from 04 March, India mandated Government Laboratories Approved 139
universal screening at all airports in the country and Supported (provided diagnostic kits
given the rise in coronavirus imports. Thermal or reagents) by ICMR
screening has been installed at 21 airports Government Laboratories Found 4
including those in Delhi, Mumbai, Kolkata, Suitable for COVID19 Testing approved
Chennai, Bengaluru, Hyderabad, and Cochin to by ICMR
check for coronavirus in India. Universal Private Laboratories for COVID-19 67
screening has been mandated for flights from Testing
China, Hong Kong, Singapore and Thailand at Collection Sites Only 3
the aero-bridges ear-marked for the purpose. Source- Indian Council Medical Research
Screening measures have also been
implemented at 12 major seaports and 65 The National Institute of Virology lab in Pune is
minor seaports and land borders. The Ministry serving as the nodal lab for coronavirus testing
of Health announced on 06 February that all in India. The Pune lab has facilities for COVID-19
molecular diagnosis and next-generation
sequencing. The labs are equipped with
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reagents to test up to 25,000 samples. The On Monday, 30 March 2020, Asia-Pacific stock
Indian government is in the process of adding markets closed mostly down while European
more coronavirus testing laboratories in the stock markets closed mostly 1% higher, and the
country. Dow Jones Industrial Average, the NASDAQ
Composite, and S&P 500 all closed more than
Economic impact 3% higher Oil prices fell by more than 6% to an
Over the preceding weekend, the Central Bank 18-year low, while the yields on 10-year and 30-
of the Republic of China announced a T$200 year U.S. Treasury securities fell to 0.66% and
billion ($6.6 billion) credit-line program to small 1.24% respectively (while their yield curve
and medium-sized businesses, while the Bank of remained normal).
Korea announced that it would conduct a $12 impact on various industries worldwide:
billion U.S. dollar-funding operation at auctions  Aerospace/defence- (47)%
to South Korean banks The South African  Air & Travel- (51)%
Reserve Bank announced that it would ease  Insurance and carrier- (38)%
banking accounting and capital regulations to  Oil and gas- (48)%
release R300 billion in credit, while the Bank of  Automotive- (35)%
Israel announced that it would ease its capital  Apparel- (36)%
requirements to facilitate greater lending by its
banking system as well.
Source-IMF
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On 31 March, Asia-Pacific stock markets  JPMorgan Chase sees a second-quarter

finished with mixed closings while European contraction of 14%.
stock markets closed up, and the Dow Jones  Goldman Sachs warns of a jaw-dropping
Industrial Average, the NASDAQ Composite, and
24%.
S&P 500 all fell by more than 1% (with the Dow
closing to its worst one-quarter decline in By comparison, during the worst quarter of the
history). Oil prices rose by 2% (but closed at Great Recession in late 2008, the economy
their worst one-month and one-quarter shrank by 8.4%. Quarterly records go only as far
declines in history), while the yields on 10-year back as the 1940s, after the Great Depression.
and 30-year U.S. Treasury securities rose to The Labor Department reported a sharp jump in
0.68% and 1.34% respectively. first-time claims for unemployment benefits.
On 1 April, Asia-Pacific and European stock
That's sure to be dwarfed next week, when the
markets closed mostly down, while the Dow
Jones Industrial Average, the NASDAQ full effects of orders for Americans across the
Composite, and S&P 500 all closed 5% down. Oil country to "hunker down" begin to show up in
prices fell, while the yields on 10-year and 30- the data. With restaurants, retailers and other
year U.S. Treasury securities fell to 0.61% and gathering places closed down or shifting to
1.23% respectively (while their yield curve minimal operations, the ranks of the
finished normal). unemployed could easily grow by 2 million in a
USA single week, said Ian Shepherdson of Pantheon
The forecasts for the country are not pretty: Macroeconomics. JPMorgan's midrange
 Oxford Economics expects the U.S. prediction of a 14% decline is far worse than
economy to shrink at an annual rate of anything Americans have seen, at least since
12% between April and June. the 1930s. The Trump administration has
proposed sending two payments of $1,000 each
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to most adults, along with two payments of billion according to the analysis. New York's
$500 each for children. Senate Republicans subway is usually considered as the nation's
have drafted a bill with payments of up to busiest due to the restrictions imposed were
$1,200 per adult. JPMorgan looks for running mostly empty which had
unemployment to soar from 3.5% to 6.25% by the Metropolitan Transportation
midyear. Painful as that would be, it's a marked Authority using $1 billion from its line of credit
improvement over the Great Recession, when to stay afloat. The airline industry, Airlines for
unemployment reached 10%. Other forecasts America (A4A), on March 16 called for a $50
see unemployment climbing as high as 9%. billion subsidy, including $4 billion for cargo
services. In a CNBC reports that airlines it was
mentioned that the airlines industry is
preparing for a ban on domestic flights after
President Trump said on March 14 he is
considering travel curbs and acting DHS
Secretary Chad Wolf said all options remained
on the table when asked about a possible ban,
the first since September 11, 2001. United
Airlines said they expected a drop of $1.5 billion
The pandemic, along with the stock market in March revenue, American Airlines said they
crash and other impacts, has led to increased expected to decrease domestic capacity by 20%
discussion of a recession in the United in April and 30% in May, and Delta Air Lines told
States. Experts differ on whether a recession employees it would cut capacity by 40%.
will actually take place, with some saying it is Groups of restaurateurs in New York City and
not inevitable and others saying the country Cincinnati called on governments to provide
may already be in a recession. Of the help to the nation's small and independent
economists surveyed in March by the University restaurants. On March 19 the New York group
of Chicago, 51% agreed or strongly agreed there called for state governments to issue orders for
would be a "major" recession caused by COVID- rent abatements, suspension of sales and
19, while 31% were uncertain or disagreed. payroll taxes, and a full shutdown so business
Economic analysts revised their forecasts interruption insurance coverage would be
downward going into March, with Goldman triggered. On March 20 the Cincinnati group
Sachs estimating on March 20 that the economy called on the federal government to provide a
could contract by as much as 24% on an $225 billion bailout to the restaurant industry. A
annualized basis during the second quarter of number of retailers, particularly grocery stores,
2020, following their 5% decline estimate just reduced their opening operational hours to
four days earlier. James Bullard, the president allow additional time to restock and deep-clean
of the Federal Reserve Bank of St. Louis, their stores. Major stores such
estimated that GDP would come down by as Walmart, Apple, Nike, Albertson's,
almost 50% in the second quarter. According to and Trader Joe's also shortened their
an analysis discussed in the New York Times, the hours. However, the Food Marketing
cost of insurance premiums may rise by 40% Institute announced that its supply chain was
next year because of the coronavirus costs. The not strained and all products would be available
total healthcare costs of treating the epidemic in the future. Major retail chains started hiring
could be anywhere from $34 billion to $251
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tens of thousands of employees to keep up with to 0.10% – the lowest rate in the bank's 325-
demand, including Walmart (150,000), CVS year existence. On 28 March, Fitch downgraded
Pharmacy (50,000), Dollar General (50,000), the UK's government debt rating from AA to
and 7 Eleven (20,000). Many stores began AA-, because of coronavirus borrowing,
limiting the number of people inside at a time, economic decline, and lingering uncertainty
to increase the typical distance between over Brexit. The ratings agency believes that the
customers, resulting in outdoor lines with UK's government deficit for 2020 might equal
people spaced six feet apart. 9% of GDP, compared to 2% the previous year.
The UK economy is heading for a recession that
United Kingdom is forecast to be deeper than the 2009 financial
The governor of the Bank of England called on crisis and one of the most severe since 1900;
the British government to provide support to the coronavirus pandemic has seen consumer
businesses affected by the virus and was demand collapse and many businesses forced
reported to be working with the Treasury to to close or significantly reduce operations.
provide a stimulus package to prevent the Business surveys have shown
British economy falling into activity crashing faster in March than during the
recession. Companies listed on the London financial crisis, but many European statistics
stock markets have fallen in value with agencies have warned of reduced accuracy of
commentators citing worries about the virus. To survey-based indicators. Following is an image
stimulate the economy, the Bank of England cut showing the some of the few effects the virus is
interest rates from 0.75 to 0.25 percent. On 19 causing the economy:
March, the interest rate was again cut this time
Some of the major issues faced:
AJSH & Co LLP

 Of those 3,642 businesses who responded  manufacturing

to the Business Impact of Coronavirus  wholesale and retail trade
(COVID-19) Survey (BICS), 45% reported  accommodation and food services
turnover that was “lower than expected”  administrative and support services
for the period 9 to 22 March 2020.
 Over a quarter (27%) of responding The main sectors that reported unaffected
businesses said they were reducing staff turnover in this period were:
levels in the short term, while 5% reported  professional, scientific and technical activities
recruiting staff in the short term.  information and communication services
 Almost half (46%) of businesses who
responded said that they had encouraged Of the total number of businesses that responded
their staff had to work from home in the their turnover had been abnormally affected, 98%
period 9 March to 22 March 2020. of these businesses attributed the coronavirus as
 The majority of responding businesses the main reason for their abnormal turnover for
reported that the prices they buy and sell at the period. Some businesses attributed the
were stable, with 68% of businesses who coronavirus as a reason for an increase in turnover
responded reporting no change to their in the recent period, which may be attributed to a
selling prices and 63% reporting that the surge in demand and some consumer stockpiling
costs of buying goods and services generally during the coronavirus pandemic.
stayed the same in the period 9 March to
22 March 2020. China
 For those businesses that responded where Millions of workers have stranded far from their
jobs while the workplaces were short-handed.
importing and exporting were applicable,
The data for February 2020 the first full month
57% of importers and 59% of exporters after the virus became a major factor in
reported that trade had been affected by January—saw official indicators of economic
COVID-19. activity fell to record lows. The
 Overall, online prices of items in the high- Caixin manufacturing index (PMI) fell to 35.7 in
demand products (HDPs) basket have February from 50 in January, showing a deep
increased by 1.1% over the period week 1 contraction. The nation's non-manufacturing
index sank even further to a record low of 29.6
(16 to 22 March) to week 2 (23 to 29
in February from 54.1 in January 2020.
March). According to the Wall Street Journal, "The
 Over the same period, most items in the factory index indicated contraction for most of
basket saw modest price changes, with 13 2019, hit by a trade war between the United
out of the 22 items showing price changes States and China. It didn't cross back into
between negative 1.0% and positive 1.0%. expansion until late last year when trade
 In the week commencing 16 March 2020, tensions between the two sides eased."
both unique shipping visits and total
China's economic growth is expected to slow by
shipping visits increased on a UK level, but up to 1.1 percentages in the first half of 2020 as
some large UK ports saw decreases in economic activity is negatively affected by the
unique visits in this period. new coronavirus outbreak, according to a
Morgan Stanley study cited by Reuters. But, on
The main sectors from those surveyed who have 1 February 2020, the People's Bank of China
said that the impact of the epidemic on China's
seen turnover lower than normal and attributed
economy was temporary and the fundamentals
this as a result of the coronavirus (COVID-19) were:
AJSH & Co LLP

of China's long-term positive and high-quality By 13 March, most of business outside Hubei
growth remained unchanged. was active again. The Caixin PMI increased to 50
Due to the outbreak, the Shanghai Stock at the end of March. Industrial output fell 13.5%
Exchange and the Shenzhen Stock in January-February, compared with 2019,
Exchange announced that with the approval of which ING economist Iris Pang told AFP was the
the China Securities Regulatory Commission, first contraction since January 1990, when
the Spring Festival holiday was extended to 2 industrial production shrank 21.1%.
February and trading will resume on 3
February. Before that, on 23 January, the last Year-on-year, fixed asset investment fell 24.5%,
trading day of shares before the Spring Festival, private sector investment fell 26.4%, and retail
all three major stock indexes opened lower, sales shrank 20.5%. “Judging by the data, the
creating a drop of about 3% and the Shanghai shock to China’s economic activity from the
index fell below 3000. On 2 February, the first coronavirus epidemic is greater than the global
trading day after the holiday, the three major financial crisis,” Zhang Yi, chief economist at
indexes even set a record low opening of about Zhonghai Shengrong Capital Management told
8%. By the end of the day, the decline narrowed Reuters. “These data suggest a small
to about 7%, the Shenzhen index fell below contraction in the first-quarter economy is a
10,000 points, and a total of 3,177 stocks in the high probability event. Government policies
two markets fell. would need to be focused on preventing large-
scale bankruptcies and unemployment.” The
The People's Bank of China and the State figures came as global deaths and infections
Administration of Foreign Exchange announced from the coronavirus surpassed those inside
that the inter-bank RMB foreign exchange China for the first time.
market, the foreign-currency-to-market and the
foreign-currency market will extend their On Monday the government injected $14.3bn
holiday closed until 2 February 2020.When the into the financial system with the offer of one-
market opened on 3 February, the Renminbi year medium-term lending facility loans. The
declined against major foreign currencies. The Central Bank also said it was cutting the amount
central parity rate of the Renminbi against the of cash a bank must hold in reserve. China’s
US dollar opened at 6.9249, a drop of 373 basis jobless rate rose to 6.2% in February, compared
points from the previous trading day. It fell with 5.2% in December and the highest since
below the 7.00 than an hour after the opening, the official records were published. Hong Kong’s
and closed at 7.0257. unemployment figures were also the highest in
three years at 3.4%, and predicted to get worse,
The sale of new cars in China was affected by financial secretary Paul Chan said. In
the outbreak. There was a 92% reduction on the construction it rose to 5.7%, and 5.2% in
volume of cars sold during the first two weeks tourism.
of February 2020. According to the sources
of Automative News, Chinese policymakers had India
discussed the extension of subsidies for electric- Indian stocks closed over 4% higher on April 09,
vehicle purchases beyond this year to revive 2020 on early signs that the coronavirus
sales, while also discussing reducing pandemic was nearing its peak globally and
expectations that the government may ease the
requirements for zero-emission vehicle shares
21-day lockdown put in place to contain the
of production. outbreak. Sentiment was also boosted by
AJSH & Co LLP

expectations of more stimulus to thwart a 50 .NSEI closed 4.15% higher at 9,111.90, while
global recession, with European Union finance the S&P BSE Sensex .BSESN ended up 4.23% at
ministers set to resume talks on a half-a-trillion 31,159.27.
support package later in the day. The NSE Nifty
It can be seen that the fall was to 7511.10 points around March 23, 2020 however the market has been
in recovery since the day and rose upto 9111.90.
AJSH & Co LLP

It can be seen that the fall was to 25638.90 Pharma and Granules India are airlifting APIs
points around March 23, 2020 however the and other input materials for their
market has been in recovery since the day and manufacturing due to limited land movements
rose upto 29893.96. and shipping delays from China as inventories
are drying up, reported Economic Times.
Impact on India’s trade with China Although the Wuhan coronavirus outbreak
With China under lock-down, India is witnessing could have a significant impact on the Indian
a major impact on imports and exports in pharmaceutical industry unless it is brought
various industries including pharmaceuticals, under control over the next few months, it also
electronics, mobiles, and auto parts. China is provides an opportunity to India’s
the biggest exporter to India, followed by the pharmaceutical manufacturers to grab share
US and UAE. In 2018, China exported goods from their Chinese competitors. However, two
worth $90.4bn to India and accounted for Indian pharmaceutical companies, Zydus Cadila
14.63% of the exports. and Ipca Laboratories, are ramping up
production to meet the sudden surge in
In 2017, telecom instruments, electronics demand. Shares of Zydus Cadila and Ipca Labs,
components, computer hardware and both listed in India, are up by 40% and 29%,
peripherals, industrial machinery for dairy, and respectively, since March 27 due to their
organic chemicals were the top five items increase production of hydroxychloroquine.
imported by India accounting for 46% of the
imports from China. On 11 March 2020, WHO declared Novel
Coronavirus Disease (COVID-19) outbreak as a
Impacts the Indian pharmaceutical industry pandemic and reiterated the call for countries
Bulk drugs and drug intermediates accounted to take immediate actions and scale up
for $1.5bn or 3% of India’s imports from China. response to treat, detect and reduce
According to the Trade Promotion Council of transmission to save people’s lives. So, many
India, approximately 85% of active countries to save its people have been taking
pharmaceutical ingredients (APIs) imported by harsh steps which is effecting the economy such
Indian companies are from China. India’s as restricting international trade, domestic
overdependence on China for APIs exposes it to trades except for essential commodities, social
raw material supply disruption and price distancing, compulsory use of sanitizers and
volatility. Another major hindrance to the masks.
Indian pharmaceutical industry is its low
capacity utilisation, according to a report from
the Ministry of Commerce and Industry (MCI). Recovery
India has a capacity utilisation between 30% The following image shows the recovery steps
and 40% as against 75% of China. Mankind in a McKinsey & Company’s report on the
corona virus-
AJSH & Co LLP

The coronavirus is guaranteed to throw the emergency measures on a scale that likely
world into recession, but economists are exceeds even the response to the 2008 financial
becoming less convinced about the potential for crisis. They’re extending credit lifelines to
a strong snapback in growth. business, paying cash to households, and
helping companies cover their wage bills so
The base case for forecasters is that a recovery, they don’t have to fire workers. Central banks
perhaps even a vigorous one, gets under way in have slashed interest rates and started new
the second half of 2020. But as the pandemic asset-purchase programs. “Assuming the
spreads through Europe and the Americas, and outbreak peaks by April/May, this will likely set
the wide range of knock-on effects comes into the stage for a recovery in the second half of
clearer view, caveats to that call are piling up. 2020,” said Chetan Ahya, chief economist at
Morgan Stanley.
“We have no certainty the virus will be gone by
the end of the second quarter,” said Nobel Prize He predicts the global economy will contract
Winner Joseph Stiglitz, a professor at Columbia 2.3% on an annualized basis in the first half of
University in New York. If it “lasts through the the year before growing 1.5% in the second
summer, then all the effects will be amplified.” half. Even that scenario means the U.S. and
The International Labor Organization warns 25 euro area won’t regain their pre-crisis levels of
million positions may be shed, and Goldman output until the third quarter of 2021.
Sachs Group Inc. said on Tuesday it expected
Following image shows prediction of McKinsey
U.S. unemployment to soar to 15%.
in case
Mckinsey & Co. notes one quarter of U.S.
households already live from paycheck to  Scenario A1 – virus resurgence-slow long
paycheck, and that 40% of Americans are term growth and muted world recovery
unable to cover an unexpected expense of $400  Scenario A3 - the economies are slowly
without borrowing. Keen to avoid an extended recovered
recession, policy makers have been taking
AJSH & Co LLP

Situation update
As of 9 April 2020 (5:00 PM), according to the cured/discharged, 1 who has migrated
Ministry of Health & Family Welfare and 169 deaths. Hospital isolation of all
(MoHFW), a total of 5865 COVID-19 confirmed cases, tracing and home quarantine
cases, (including 71 foreign nationals) have of the contacts is ongoing.
been reported in 31 states/union territories.
These include 477 who have been
AJSH & Co LLP

WHO Country Office for India

WHO Country Office for India has been working and build capacity of the health system.
closely with MoHFW on preparedness and WHO stands together in solidarity with the
response measures for COVID-19, including government in its firm resolve to overcome this
surveillance and contact tracing, laboratory unprecedented challenge," says Dr Henk
diagnosis, risk communications and community Bekedam, WHO Representative to India.
engagement, hospital preparedness, infection
prevention and control, and implementation of Conclusion
containment plan. WHO declared the virus as a pandemic which is
the highest level of emergency situation. The
India is at a crucial juncture in its fight against virus is not only effecting the people but the
COVID-19. The country has responded with whole economies of the countries. The whole
urgency and determination as reflected in the world is fighting it collectively to recover from
Prime Minister's bold and decisive this worsening situation. However, a ray of
leadership.The government has also hope can be seen due to decrease in rate of
aggressively stepped up the response measures infections reported daily. Following a table as
- find, isolate, test, treat and trace. WHO is on April 09, 2020 showing details of the virus
supporting the government's endeavour to infection, cases, death worldwide-
further strengthen and intensify surveillance
Country Total cases Percentage New Total New Total % infected of

of cases cases deaths deaths recovered inspected
World 1,539,118 100% 21,158 89,985 1,530 340,551

USA 435,941 28.32% 1,014 14,865 77 22,941 19%
Spain 152,446 9.90% 4,226 15,238 446 52,165 43%
Italy 139,422 9.06% 17,669 26,491 17%
Germany 113,615 7.38% 319 2,349 46,300 9%
France 112,950 7.34% 10,869 21,254 50%
China 81,865 5.32% 63 3,335 2 77,370 Data not
available
Iran 66,220 4.30% 1,634 4,110 117 32,309 29%
UK 60,733 3.95% 7,097 135 22%
Turkey 38,226 2.48% 812 1,846 15%
Belgium 24,983 1.62% 1,580 2,523 283 5,164 30%
Switzerland 23,799 1.55% 519 937 42 9,900 13%
Netherlands 21,762 1.41% 1,213 2,396 148 250 21%
Canada 19,438 1.26% 435 8 4,653 5%
Brazil 16,275 1.06% 87 826 6 173 30%
Portugal 13,956 0.91% 815 409 29 205 10%
Austria 13,206 0.86% 264 295 22 5,240 10%
S. Korea 10,423 0.68% 39 204 4 6,973 2%
Russia 10,131 0.66% 1,459 76 13 698 1%
Israel 9,755 0.63% 351 79 6 864 8%
Sweden 9,141 0.59% 722 793 106 205 17%
India 6,588 0.43% 672 186 8 569 4%
Norway 6,160 0.40% 118 104 3 32 5%
Australia 6,104 0.40% 52 51 1 2,987 2%
AJSH & Co LLP

Bibliography
1. Sensex charts and Nifty charts
https://economictimes.indiatimes.com/indices/sensex_30_companies
https://economictimes.indiatimes.com/indices/nifty_50_companies
2. Covid-19 Briefing note by McKinsey & Company
https://www.mckinsey.com/
3. Data on Economy, Lockdowns, Measures
https://economictimes.indiatimes.com/wealth/invest/stock-market-hit-by-coronavirus-reasons-
for-turmoil-what-equity-investors-should-do-now/articleshow/74623291.cms?from=mdr
https://www.wired.co.uk/article/uk-lockdown
https://www.telegraph.co.uk/news/2020/04/10/uk-lockdown-extended-coronavirus/
https://www.ft.com/content/ccab6f57-0ef8-45b2-a552-3a03e15c1f63
https://www.thehindu.com/news/international/japans-state-of-emergency-is-no-lockdown-
whats-in-it/article31287037.ece
https://en.as.com/en/2020/04/07/other_sports/1586293073_218312.html
4. Impact of Corona
https://www.pharmaceutical-technology.com/features/coronavirus-affected-countries-india-
measures-impact-pharma-economy/
https://qz.com/1819911/how-countries-are-successfully-containing-coronavirus/
https://www.businesstoday.in/current/economy-politics/coronavirus-update-india-cancels-all-
visas-till-april-15/story/398044.html
https://en.wikipedia.org/wiki/Socio-
economic_impact_of_the_2019%E2%80%9320_coronavirus_pandemic#United_States
https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/conditionsanddi
seases/bulletins/coronavirustheukeconomyandsocietyfasterindicators/9april2020
5. Report and Data of WHO & ICMR
https://www.who.int/india/emergencies/novel-coronavirus-2019
https://icmr.nic.in/sites/default/files/whats_new/ICMR_testing_update_09April_9PM_IST.pdf
https://www.icmr.nic.in/node/39071
https://ourworldindata.org/coronavirus#all-charts-preview
https://www.worldometers.info/coronavirus/
https://www.worldometers.info/coronavirus/coronavirus-cases/
Disclaimer
The contents herein are solely meant for communicating information and not as professional advice. It
may contain confidential or legally privileged information. The addressee is hereby notified that any
disclosure, copy, or distribution of this material or the contents there of may be unlawful and is strictly
prohibited. Also the contents cannot be considered as any opinion/ advice and should not be used as
basis for any decision. Before taking any decision/ advice please consult a qualified professional advisor.
While due care has been taken to ensure the accuracy of information contained herein, no warranty,
express or implied, is being made by us as regards the accuracy and adequacy of the information
contained herein. AJSH & Co LLP and Mercurius Advisory Services shall not be responsible for any loss
whatsoever sustained by any person who relies on this material.
AJSH & Co LLP

About us
AJSH & Co LLP (“AJSH”) is an independent firm Mercurius Advisory Services (“MAS”) is a team
of Business Advisors and Chartered Accountants of eminent and trained advisors and
with its corporate office situated at New Delhi. consultants, specializing in the field of
AJSH has brought together a team of highly outsourcing services based in New Delhi, India.
qualified and experienced consultants from It offers a comprehensive suite of professional
diverse professional fields and expertise. We consultancy services to its clients ranging from
cater to Indian and multinational corporates, accounting, finance and taxation to legal
high net worth individuals, financial institutions, consultancy and human resource management.
start-ups and expatriates.
MAS has achieved an exponential growth in its
We specialize in the fields of accounting, international accounting and business
auditing and assurance, taxation, foreign consulting practice and has position itself
investments along with a host of other financial amongst one of the most reputed accounting
services. AJSH is an ISO 9001:2015 certified firm companies in India.
and is also registered with Public Company
MAS, inter alia, provide low cost accounting
Accounting Oversight Board (USA). We have
solutions to its clients across the globe on an
clients in India, USA, Africa, Australia, Europe,
outsourced basis. We support our clients to
Hong Kong, Japan, China, Malaysia, Singapore
streamline their day-to-day business operations
and Thailand. Thus, we work across several
and lower their overhead costs without
different time zones based on our client needs.
compromising on quality or productivity. Our
We are a member firm of TIAG (USA). TIAG is a clientele ranges from start-ups to large
worldwide alliance of independent accounting established business houses that operate across
firms with more than 120 member firms based the globe in various sectors.
in over 70 countries and UTN. We are also a
MAS is also a member firm of TIAG (USA) and
member of United Tax Network (UTN)
holds ISO certificate 27001:2013.
representing from India, getting the firm’s
foothold in Western Countries.
AJSH & Co LLP

Contact us
Ankit Jain Siddhartha Havelia Address

+91 98106 61322 +91 98113 25385 C-7/227, Sector-7
[email protected] [email protected] Rohini, New Delhi-110085
[email protected] [email protected] T: +91-11-4559 6689
C-7/227, Sector-7, Rohini, New Delhi-110085, T: +91-11-4559 6689
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Impact of Covid-19 on Global Economy April 10, 2020

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COVID- 19 Growth & Worldwide cases......................................................................................................... 3

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COVID- 19 Growth & Worldwide cases

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Other countries China

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Total number of cases

Following is a table which shows the total 2-Mar 90443 9%

Date Total number of cases Rate of 10-Mar 118948 17%

19-Feb 75700 9% As in the above table it can clearly be seen that

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Not surprisingly, the lockdown is already

Government on April 09, 2020 sanctioned

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The Indian government is expected to extend

Availability of coronavirus drugs

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Coronavirus screening, testing Labs testing for coronavirus in India

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AJSH & Co LLP

On 31 March, Asia-Pacific stock markets  JPMorgan Chase sees a second-quarter

Some of the major issues faced:

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 Of those 3,642 businesses who responded  manufacturing

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AJSH & Co LLP

AJSH & Co LLP

AJSH & Co LLP

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WHO Country Office for India

Country Total cases Percentage New Total New Total % infected of

World 1,539,118 100% 21,158 89,985 1,530 340,551

AJSH & Co LLP

AJSH & Co LLP

AJSH & Co LLP

Ankit Jain Siddhartha Havelia Address

C-7/227, Sector-7, Rohini, New Delhi-110085, T: +91-11-4559 6689

AJSH & Co LLP

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