Lockdowns costing global economy up to $30 trillion

The lockdown measure adopted by some countries around the world to suppress the spread of coronavirus disease 2019 (Covid-19) is costing the global economy USD25 trillion to USD30 trillion, Juwai IQI chief economist Shan Saeed said.

“Presently, 127 countries are partially or fully lockdown(ed) in order to control the spread of the virus. The economic cost of global lockdown is around USD25 trillion to USD30 trillion, which is colossal,” Saeed said.

He said the restrictions implemented by countries have affected airlines, manufacturing, hotels, and tourism globally.

On the other hand, demand for medical products and services, food, online services, and logistics surge amid the pandemic.

While countries around the world are combating the Covid-19 outbreak, China’s economic recovery is expected to lift global macroeconomic outlook once the crisis eases, Saeed said.

“With China very effectively and masterly containing the spread of Covid-19, there is a renewed confidence in the global economy that China will lead from the front in economic growth,” he said.

In a news conference in Beijing over the weekend, People’s Bank of China Deputy Governor Chen Yulu said China’s financial market and market expectations are generally stable, while space for macro policies and tool reserves are sufficient.

It can be recalled that many businesses in China, including factories in the world’s manufacturing powerhouse, shut down for two weeks since the Chinese New Year holiday to contain the Covid-19 outbreak.

Saeed said the rise of China will benefit its Belt and Road Initiative (BRI) partners, including the Philippines, Indonesia, Malaysia, Sri Lanka, Pakistan, Mongolia, Kazakhstan, Turkey, Iran, Egypt, and Djibouti.

“These are part of infrastructure investment route for China. These countries have macroeconomic stability, young demographics, strong labor force, and good infrastructure,” he added.

Despite some restrictions adopted by governments around the world, Saeed said China can still trade in Asean and African countries.

“Some countries will open up slow, some countries will open up fast, but Asia will lead in the trade landscapes, with China in the front,” he said.

Once the global economy starts to recover, Saeed cited some sectors in the Philippines where Chinese investors are expected to invest.

“According to our market intelligence report, with aggregate demand from China coming back strongly, some sectors in (the) Philippines will get special attention: real estate, services, manufacturing, and tourism,” he said. (PNA)

Source: Philippines News Agency

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