The impact of the coronavirus outbreak on the world economy as of today is rather pessimistic.
Before the WHO declared coronavirus (COVID-19) a pandemic, Bloomberg had estimated the losses to the global economy at $2.7 trillion.
The crisis worsens as the Empire State Manufacturing Survey released disappointing numbers showing that the general business condition index plummeted to -21.5, reaching the lowest level since 2009.
According to JPMorgan, US and Europe are heading towards a coronavirus-driven recession.
Among the general sense of panic and fear, there is still room for some positive news, too.
On Sunday March 15, the Federal Reserve made a bold move and announced a decision to cut its target interest rate near zero in an attempt to support the economy during the coronavirus pandemic.
The US central bank also struck a deal with a number of central banks around the world – the European Central Bank, Bank of England, Bank of Japan, Bank of Canada and Swiss National Bank – in an attempt to reinforce liquidity and maintain a smooth operation of financial markets.
Not only that, but the banks also agreed to lower their rates on currency swaps. This will help to keep lower cost of the USD and ease market stress.
Following the example of its cross-Atlantic counterpart, The Bank of England has cut interest rates by half a percentage point, from 0.75% to 0.25%.
The World Bank has committed $12bn to aid the developing countries that are fighting against the spread of the coronavirus.
“Right now, it hasn’t had the impact people think,” said Bank of America CEO Brian Moynihan, referring to the impact of coronavirus on the economy. “This is a war. We’re in a war to contain this virus.”