The coronavirus recession, also known as the Great Lockdown or Great Shutdown, is a severe global economic recession which began affecting the world economy in early 2020 during the COVID-19 pandemic. The recession has been the steepest economic downturn since the Great Depression. On 2020, the International Monetary Fund (IMF) reported that all of the G7 nations had already entered or were entering into what was called a “deep recession”, alongside most of the western world with significant slowdown of growth across developing and emerging economies.[9] The IMF has stated that the economic decline is “far worse” than that of the Great Recession in 2009 financial crisis
Global stock market crash began on 20 February 2020.[Due to the Coronavirus Pandemic, global markets, banks and businesses were all facing crises not seen since the Great Depression in 1929.
From 24 to 28 February, stock markets worldwide reported their largest one-week declines since the 2008 financial crisis, thus entering a correction. Global markets into early March became extremely volatile, with large swings occurring in global markets.[On 9 March, most global markets reported severe contractions, mainly in response to the COVID-19 pandemic and an oil price war between Russia and the OPEC countries led by Saudi Arabia. This became colloquially known as Black Monday I, and at the time was the worst drop since the Great Recession in 2008.
Three days after Black Monday I there was another drop, Black Thursday, where stocks across Europe and North America fell more than 9%. Wall Street experienced its largest single-day percentage drop since Black Monday in 1987, and the FTSE MIB of the Borsa Italiana fell nearly 17%, becoming the worst-hit market during Black Thursday. Despite a temporary rally on 13 March (with markets posting their best day since 2008), all three Wall Street indexes fell more than 12% when markets re-opened on 16 March. During this time, one benchmark stock market index in all G7 countries and 14 of the G20 countries had been declared to be in Bear markets.
Impact by sector
Automotive industry[
The outbreak of the Novel Coronavirus (COVID-19), which originated in Wuhan, China in end-December 2019, is fast spreading its tentacles across the world and is having a major impact on all aspects of society, including the automotive industry. All through January and February, automakers and their suppliers have been scrambling to keep vehicle assembly lines humming but March has seen the industry take concerted action, in sync with government advisories, to keep its personnel safe.
With the World Health Organisation declaring the COVID-19 outbreak a pandemic, an unprecedented global disruption is at hand. Automobile and component manufacturing plants are being shuttered around the world, consumer footfalls in showrooms have fallen sharply, vehicle sales are dropping dramatically and almost every major industry event is either being cancelled or going the digital way. All of March has been packed with coronavirus-related news and it all started with the cancellation of the 2020 Geneva Motor Show, which was to open on March 5.
Energy
The International Energy Agency said Thursday it expects global energy demand to plunge this year in what the Paris-based agency called the biggest drop since World War II.
With roughly 4.2 billion people around the world subject to some form of lockdown in an effort to slow the spread of the coronavirus, the IEA is forecasting a 6% decline in energy demand for the year. In absolute terms this is the largest on record. Percentage wise, it’s the steepest decline in 70 years.
The demand hit from the pandemic is expected to be seven times greater than the decline in the aftermath of the financial crisis in 2008.
“In absolute terms, the decline is unprecedented — the equivalent of losing the entire energy demand of India, the world’s third largest energy consumer,” the agency’s Global Energy Report said.
The projections are based on the assumption that shelter-in-place and social distancing measures will slowly ease in the coming months, with a gradual economic recovery following. Under a faster return-to-business scenario, the IEA said demand loss could be limited to 3.8%, while a possible second wave of the virus could cause a greater than 6% decline.
“This is a historic shock to the entire energy world. Amid today’s unparalleled health and economic crises, the plunge in demand for nearly all major fuels is staggering, especially for coal, oil and gas,” IEA executive director Fatih Birol said in a statement.
“It is still too early to determine the longer-term impacts, but the energy industry that emerges from this crisis will be significantly different from the one that came before,” he added.
Restaurants
NEW DELHI: Among the businesses being hit due to the coronavirus outbreak in India is the multi-crore restaurant industry, as footfall dipped at most joints, and several others prepared to shut down.
In the last two weeks, popular hangout places, which would otherwise be at full capacity, especially during weekends and ladies nights, have experienced a steep fall in their customer base, with people avoiding crowded places and choosing to stay at home.
According to the National Restaurant Association of India, in-restaurant dining has witnessed “an approximate business drop of 30-35 per cent”.
“There has been a definite impact of the epidemic in the overall foodservice business, with various segments being impacted in varying degrees.
“In-restaurant dining is also seeing a big impact. With the restaurants located within mall premises recording a sharper drop,” Anurag Katriar, President of NRAI, told PTI.
The COVID-19 outbreak which has been declared a pandemic by the WHO has infected at least 126 people in India and claimed three lives.
Globally, more than 1,50,000 people have tested positive for the deadly virus.
Delhi-based Vineet Khunger, who used to go out to dine or party at least twice or thrice a week, has now restricted himself within the four walls of his house.
“I’m pretty paranoid about it, considering it’s ridiculously contagious and you wouldn’t even know you have it for the first few days.”
“I’m barely stepping out in the evening these days – best to play it safe till it blows over. I’m avoiding malls, any large gatherings, and even cramped, tightly-packed restaurants and pubs,” said the 39-year-old interior firm designer.
To reassure people like Khunger, several restaurants in Delhi, and outside have adopted the precautionary measures in accordance with the WHO guidelines and made sanitiser facilities available for both the staff as well as the customers.
Kampai, a Japanese cuisine restaurant in Aerocity, has stepped up its hygiene regime.
“Footfall has definitely dipped and business has suffered. But we are assuring our customers of all the hygiene practices we are following in order for them to feel safe while dining with us.”
“Japanese cuisine on its own comes with very high levels of discipline in the kitchen and restaurant floor. Additionally, our team works with masks, gloves and constantly sanitises,” said Avantika Sinhala Bahl, Founder & Director of Kampai.
She added that the furniture at the restaurant is also disinfected regularly using alcohol-based disinfectants, and guests are asked to sanitise before entering the dining space.
Following a strict precautionary routine of sanitising facilities, and thermal screening both his staff and customers for nearly two weeks, F&B entrepreneur Priyank Sukhija has decided to shut all his properties across the country starting March 18 till March 31.
Sukhija, who owns restaurant chains including Lord Of The Drinks, Café Jalwa, Tamasha, Lazeez Affaire, RPM, and Flying Saucer, said in the current situation, he had “to think about our staff and patrons more than our business”.
“In the wake of coronavirus we can’t deny the fact that re
Retail
Retail: Social distancing is likely to significantly impact the retail sector business in the coming days, the report said. “Retail is typically a high operating leverage business as rent, employee cost and utility are largely fixed in nature and hence any loss of revenue has a large bearing on profitability. Within various retailers, apparel retailers are the most impacted followed by food retailers (restaurants) and grocery retailers are the least impacted,” it also said.
Real estate: The residential sector is expected to take a long time to see recovery as it was already under stress before coronavirus arrived, the report said. “Retail demand also impacted due to the shutdown. Rentals will have to be foregone as clients would not be in a position to pay and enforcing Force Majeure clause may not be easy given long standing relationships. Commercial segment will see least impact in the short term. Deferment of sales could be prolonged due to negative wealth effect and possible reduction in income levels,” it said.
Banking: Coronavirus would lead to weak loan growth and rising bad loans especially in the retail credit segment, DSP Investment Managers report said. “We have seen more than 20%+ earnings cut across financiers in FY21E. Large private banks and NBFCs are better placed to gain market share in the medium term however, with weak near term outlook valuations could see further correction / time correct,” it added.
Transportation/aviation
London (CNN Business)Global airlines stand to lose $113 billion in sales if the coronavirus continues to spread, according to the International Air Transport Association.
The losses would be similar to those experienced by the aviation industry during the global financial crisis of 2008, IATA warned as it dramatically increased its estimate of the damage caused by the outbreak. It said airlines could lose 19% of their business if the virus isn’t contained soon.
Just two weeks ago, IATA had been expecting lost sales in the range of $30 billion.
“The turn of events as a result of [the coronavirus] is almost without precedent. In little over two months, the industry’s prospects in much of the world have taken a dramatic turn for the worse,” Alexandre de Juniac, the CEO of the industry group, said in a statement. “It is unclear how the virus will develop, but … this is a crisis.”
Airlines in Europe and Asia would bear the brunt of the pain, according to IATA. Carriers in Asia Pacific could lose out on sales worth $58 billion.
Airlines in Europe and Asia would bear the brunt of the pain, according to IATA. Carriers in Asia Pacific could lose out on sales worth $58 billion.
There are already more than 94,000 confirmed cases of the novel coronavirus worldwide, and nearly 3,300 deaths, mostly in China. South Korea, Japan, Italy and Iran also already suffering major outbreaks.
Travel restrictions and a lack of demand from customers have encouraged dozen of major airlines to cancel flights to and from mainland China because of the coronavirus. Transatlantic flights, as well as capacity on routes within Europe and the United States, have also been curtailed.
Struggling UK carrier Flybe collapsed earlier Thursday as the slump in demand killed off hopes of a government-backed rescue. Scottish airline Logan air said it would take over 16 of Flybe’s routes over the coming months.
think big 