The data is clear: the economic impact of the new coronavirus is the greatest ever caused by an epidemic.

SARS-CoV-2, scientifically named COVID-19, emerged in China, when the Wuhan Municipal Health Commission reported 27 cases of pneumonia of unknown origin. Since then, the virus has spread rapidly across entire continents and has accumulated thousands of deaths and infections.

According to a study by Bain & Company, the losses caused by COVID-19 could exceed $ 70 billion for China, indicating a reduction of up to 0,5% of its gross domestic product (GDP), greater than that of all previous outbreaks. In Italy, with the end of all non-essential productive activities and all the chaos caused by the virus, the GDP fell by 4,7% in the first quarter, the worst result since 1995, and current market forecasts point to a 5% drop in the second quarter. In the United States, the new epicentre of the epidemic with more than 1,300,000 infected, Trump declares: “The world is at war with a hidden enemy”.

In the financial markets, the reaction to the epidemic was intense. In Europe, the main indices have dropped everything that had risen last year, around 25%, as for example the case of the German index DAX-30, which reached historical highs in 2019. The main North American indices, which include the main companies in the United States, fell by 17% in three weeks compared to the maximum values this year. During the outbreak, stock markets have already lost five billion dollars worldwide.

Almost all sectors are being affected, such as Tourism and Hospitality, Oil and Gas, Automotive and Consumer Products. The Coachella and Stagecoach music festivals have been postponed; even the 2020 Summer Olympics in Tokyo, an event eagerly awaited by both the public and athletes, has been postponed to 2021. 

One of the first sectors to be hit was aviation. US flight bookings to all regions of the world have fallen sharply. There was a 98,1% drop in flights to Asia, 31,9% to Europe and 22,6% to Africa and the Middle East. The index that follows aviation companies in Europe has already sunk more than 30% since the beginning of the year. Shares in companies like Delta and United Airlines fell by around 10%, Britain’s Flybe went bankrupt; all collapsing in the face of the enormous crisis that has been taking place in the world.

With all this doom and gloom at the kick-off of the decade, the European economists are unanimous on one issue: a major recession is coming. According to the chairwoman and managing director of the International Monetary Fund (IMF), Kristalina Georgieva, “It is now clear that we have entered a recession as bad or worse than in 2009”. A dismal prospect for a year in which Brexit financial stabilization and reduction of tension between the US and China were expected. We still do not know the exact extent that this crisis can take, but we do know that it will take a long time for the economic world to fully weather the storm.