ISA Risk Alert: The Coronavirus Crisis (30th of March)
Daily Summary
The number of known cases of the coronavirus (Covid-19) around the world rose to more than 725,000 after this past weekend, while the number of deaths attributed to this outbreak has risen to more than 34,000. The number of known cases of the virus is now expected to surpass one million no later than this coming weekend.
The number of active cases of the coronavirus in the United States continued to rise rapidly, reaching 135,600. While the fatality rate in the US remained well below those of most other countries (due to the US’ relatively-high level of preparedness for such a crisis), the number of deaths nevertheless continued to rise sharply, reaching nearly 2,500.
While the number of new cases of the coronavirus in Italy and Spain appears to have levelled off (for now), the number of deaths in those two countries rose to a combined 17,500. This has led to growing anger in those countries, both towards their own governments as well as towards what is perceived to be a lack of support from other European governments.
Oil prices resumed their downwards trend that was started by a weakening global economy earlier this year, then worsened by a dispute between Saudi Arabia and Russia, and is now being accelerated by the dramatic fall in demand for oil as a result of the economic impact of the coronavirus crisis. This will add to the downwards pressure already in place on the economies of oil-producing countries.
Key Developments
Disparate Fatality Rates: The fatality rates connected to the coronavirus crisis continue to vary greatly between countries, with extremely high fatality rates in some European countries (Italy, Spain, the Netherlands and others) countered by low rates in Germany, South Korea and the US.
India on Lockdown: Indian Prime Minister Narendra Modi ordered a sudden lockdown of his country last week as it prepared to deal with the worsening coronavirus crisis. These measures caused shock and confusion across India, which so far has relatively few cases.
Trend to Watch
An increasing number of sporting events and leagues are coming to the inevitable conclusion that they will have to cancel, not just postpone, their competitions for this year, a development that will have major economic repercussions around the globe.
The Coming Days
No region appears likely to suffer a deeper recession in 2020 than Europe, with forecasts for countries such as Germany, France and Italy now calling for an economic contraction of at least 7% in each of those countries this year.