The coronavirus scare is spreading fast across the globe with the death toll climbing closer to 3,000 and over 80,000 reported cases. Economists have started estimating the effects of the epidemic in the globalisation era on the world economy.
According to a Bloomberg report, Oxford Economics expects an international health crisis to wipe more than $1 trillion from the global GDP (gross domestic product) from an increase in workplace absenteeism, lower productivity, sliding travel, disrupted supply chains and reduced trade and investment.
This week, stock markets have reacted strongly to the unanticipated spread of the virus beyond China.
The S&P 500 wiped out about $1.737 trillion of its value in the last two-day sell-off in US markets. In India, stock market indices have slipped for the fourth consecutive session on Wednesday.
Just as mainland China started showing signs of waning speed in the spread of infections and movement restrictions, a sudden increase in confirmed cases were seen in South Korea, Iran and Italy over the weekend.
Director-general of WHO said that the fact that these cases were not liked to Wuhan or China was "very worrisome," but the organisation hasn't declared the Covid-19 outbreak as a global pandemic yet.
IMF currently expects the virus to force it to knock only 0.1 percentage point off its 3.3 percent global growth forecast for 2020. Chief economist Gita Gopinath said in an interview that a pandemic declaration would risk "really downside, dire scenarios".