ISA Coronavirus Update (21st of August)

Daily Summary

The number of diagnosed cases of the coronavirus (Covid-19) continued to rise, reaching the 2.5 million mark.  Meanwhile, the number of fatalities linked to the coronavirus rose to more than 171,000 worldwide.  These figures represented increases of 800% in the number of cases and 1,400% in the number of fatalities over the past month.

The United States remained the country with the most cases, with nearly 800,000 cases of the coronavirus having been discovered in the US, nearly 40% of which have been found in the Greater New York City area.  The number of fatalities in the US has now risen to more than 42,000, or 24% of the global total.

The World Health Organization (WHO) warned that only 2%-3% of the world’s population appear to have antibodies in their blood showing that they have been infected by the Covid-19 virus.  This was bad news for those who hope that herd immunity will make it easier for countries to ease their lockdowns in the weeks and months ahead.

As the number of cases of the coronavirus continues to rise sharply in Sub-Saharan Africa, there are fears that this could cause massive harm for that region’s economy.  Yesterday, Rwandan President Paul Kagame warned that the region might need more than $100 billion in international financial aid just to weather this crisis.

 

Key Developments

Negative Oil Prices: For the first time in history, oil prices in the United States turned negative, highlighting the dramatic impact that the coronavirus crisis is having on the global economy and the oil industry.  At one point, the price of a barrel of oil in the US was as low as -$38.

A Bounce Back in 2021?: For the moment, we are forecasting growth of 5.4% for the global economy in 2021, a strong recovery from the contraction expected this year.  However, prolonged periods of lockdown and other disruptions could extend the current downturn well into next year.