World Prepares For Coronavirus Pandemic As Markets Brace For Recession

There is no cure for the coronavirus, which can lead to pneumonia, and a vaccine may take up to 18 months to develop.

Geneva/Beijing: 

Hopes the coronavirus would be contained to China vanished on Friday as infections spread rapidly around the world, countries started stockpiling medical equipment and investors took flight in expectation of a global recession.

Share prices were on track for the worst week since the global financial crisis in 2008 as virus-related disruptions to international travel and supply chains fuelled fears of recession in the United States and the Euro zone.

The US stock markets fell into correction territory with the benchmark S&P 500 index down more than 4 per cent on Thursday, extending a market rout that has now sliced more than 10 per cent off of its closing peak on February 19. Asian stocks on Friday tracked Wall Street’s plunge.

“The coronavirus now looks like a pandemic. Markets can cope even if there is big risk as long as we can see the end of the tunnel,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

“But at the moment, no one can tell how long this will last and how severe it will get.”

Mainland China – where the virus originated late last year – reported 327 new cases on Friday, the lowest since January 23.

But with new infections reported around the world now surpassing those in China, World Health Organization (WHO) Director General Tedros Adhanom Ghebreyesus said nations should prepare.

“This virus has pandemic potential,” Tedros said. “This is not a time for fear. This is a time for taking action to prevent infection and save lives now.”

A tally by news agency Reuters showed about 10 countries reported their first virus cases in past 24 hours, including Nigeria, the most populous country in Africa and the first case in sub-Saharan Africa.

US investment bank BofA cut its world growth forecast to the lowest level since the peak of the financial crisis, and ratings agency Moody’s said a coronavirus pandemic would trigger global and US recessions in the first half of the year.

Medical Stockpiling 

In addition to stockpiling medical supplies, governments ordered schools shut and canceled big gatherings, including sports events, to try to halt the spread of the flu-like disease known as COVID-19.

US President Donald Trump’s administration was considering invoking special powers to rapidly expand US production of protective gear, two officials told Reuters.

In Europe, France’s number of reported cases doubled, Germany warned of an impending epidemic and Greece, a gateway for refugees from the Middle East, announced tighter border controls.

“We have a crisis before us. An epidemic is on its way,” French President Emmanuel Macron said.

The death toll in Italy, Europe’s worst-hit country, rose to 17 on Thursday and the number of people who tested positive for the illness increased by more than 200 to 650. Germany has about 27 cases, France around 18 and Spain 15.

Tedros told reporters in Geneva that Iran, Italy and South Korea were at a “decisive point” in their efforts to prevent a wider outbreak.