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A2 Global Risk publishes Pandemic Monitor, a weekly report examining how the the pandemic is affecting industry, trade and geopolitics. The monitor is part of our portfolio of geopolitical intelligence reporting services.

In the latest report on 4 March, we noted that governments across the world had announced stimulus packages or policy shifts in a bid to reduce the burden on corporate entities who are struggling amid the ongoing epidemic of the novel coronavirus, COVID-19, which has been spreading across the world since December 2019.

A2 also correctly predicted that as the outbreak continues to spread and countries such as Italy and the UK continue to report a spike in the total number of daily cases, the WHO would declare a global pandemic. A significant breakthrough made in limiting the spread of the virus or the development of an effective cure is unlkely to occur for at least another 6-12 months.

REGIONAL SPREAD

Each report offers a regional breakdown, with the most up-to-date situations regarding numbers of cases and deaths, government measures to curb the spread, travel restrictions, and impact on local industry and trade. The breakdown closely examines each unique situation in the Americas, Asia-Pacific, Europe, Middle East and North Africa, and Sub-Saharan Africa.

INDUSTRY SECTORAL IMPACT

The most recent report analyses how the protracted disruption to supply chains in China and the outbreaks in Iran and southern Europe is impacting business operations across different sectors and countries. The full report assesses the impact on Commercial Aviation, Shipping, Overland Mobility, Goods-Manufacturing, and global supply-chains. Highlights include:

The supply chain

Manufacturing of motor vehicles has suffered, with car sales in China dropping by 92 per cent in February due to the authorities’ lockdowns.

Manufacturers such as Tesla are forced to find innovative solutions due to shortages in parts from areas in China affected by the outbreak.

Commercial aviation

The protracted flight suspensions and cancellations worldwide is challenging companies’ resilience and viability.

The International Air Transport Association (IATA) estimates that total losses to the industry could be USD29 billion, or a 4.9 industry-wide drop.

Tourism and travel

Organisers of business, cultural, and sporting events are under intense pressure to cancel or postpone those. For companies this has a clear operational impact as events form a key part of outreach and business development efforts.

Tourism activity, which peaks between April and September, presents a major source of foreign exchange earnings. Many tour operators will likely face bankruptcy as a consequence of cancelled major public events.

GEOPOLITICAL TRENDS

In each report, we look closely at the extent of the damage to the global economy due to the coronavirus, as well as give insights on the impact on Foreign Investment and Bilateral Relations. Highlights include:

Downgraded growth forecasts

The Organisation for Economic Co-operation and Development (OECD) predicts that global GDP growth would slow to 2.4 per cent in 2020, down from 2.9 per cent last year.

Other projected downgrades to GDP growth outlooks for Nigeria, China, India, and South Africa.

Rate cuts

Central banking institutions including the US Federal Reserve announce monetary policy changes in a bid to improve access to credit for small- and medium-sized enterprises.

Uncertainty surrounding the extent and pace of the spread of the outbreaks in Europe and the US is likely to keep investors jittery.

Source: A2 Global Risk