ISA Coronavirus Update (30th of April)

Daily Summary

The number of worldwide cases of the coronavirus (Covid-19) approached 3,250,000, while the number of fatalities rose to more than 228,000.  Of note, more than one million around the world have now recovered from the virus.

South Korea reported no new domestically-transmitted cases of the coronavirus today.  This is a far-cry from the 900 new cases that were being found in that country on a daily basis just two months ago.

A number of countries have declared that they have fully contained the spread of the coronavirus within their borders, including New Zealand and the Czech Republic.  

Testing levels continued to rise around the world, but nowhere have they risen high enough to reach the level recommended by experts to fully reopen the economy.  This has led to governments scrambling to increase their country’s testing capacity, a challenging task for larger and more dispersed countries.

While many countries in West Europe have Covid-19 fatality levels of more than 350 per million, no country in Central Europe has a fatality level of more than 45 per million. This has been attributed to many factors, including the swift action of the region’s governments to close borders, restrict travel and enforce mask-wearing in public.

Key Developments

A Sharp Decline for the US Economy: In the first quarter, the US economy contracted by 4.8% on an annualized basis (it expanded by 0.3% year-on-year), its worst performance since early 2009.  A dramatic decline in household spending was the key factor in this decline.

European Economies Are Battered by the Coronavirus: The European Union economy contracted by 3.5% on a quarter-on-quarter basis during the first quarter (-2.7% year-on-year), while the Eurozone economy shrank by 3.3% quarter-on-quarter (-3.8% year-on-year).  France and Spain both shrank even faster.

Trend to Watch

The International Energy Agency (IEA) reported that they estimate the worldwide level of greenhouse gas emissions will fall by 8% this year as a result of the dramatic reduction in road, air and sea travel in recent months, as well as the fall in industrial production.

The Coming Days

The Indian government finally allowed some of the 140 million migrant workers in that country to return to their homes, as travel bans had prevented them from doing so over the previous month.  These workers have suffered massive losses during the pandemic.