Global economic impact of COVID-19

The number of confirmed COVID-19 cases outside of China has increased at an exponential rate. There have now been more new cases confirmed outside of China than within China.

Most Rapid Increases In Confirmed Cases – South Korea, Italy, Iran

Over the last few days the confirmed cases in South Korea, Italy and Iran have sky-rocketed past 1,000 confirmed cases in each country. South Korea has 5,766 confirmed cases, Italy has 3,089 confirmed cases and Iran has 2,922 confirmed cases. 

While there have been reports that the virus is only as deadly as the common flu. The death rate statistics of 3.44% have now proven otherwise. This death rate is worsened depending on where patients are being treated. There are reports of medical supply shortages coming from South Korea as it grapples with the large numbers of confirmed cases. 

Federal Rate Cuts – The United States

A desperate measure from the Federal Reserves saw them slashing interest rates in an attempt to protect the United States economy. The central bank also states that they may use further tools to help support the economy. 

Business Insider reports that the United States national emergency stockpile has 12 million N95 respirator masks and 30 million surgical face masks. There has also been an $8 billion deal that US lawmakers have signed to fight the COVID-19. 

Visitors that are traveling from China, Iran, Northern Italy and the Republic of Korea within the last 14 days will not be allowed to transit or enter Singapore. A compulsory 14 days quarantine will be in place for Singaporeans that return from the aforementioned countries. 

As the number of new cases in Singapore remains at around 100, the panic amongst local Singaporeans appears to have been reduced. However, the widespread global impact does not only come from the number of people infected. 

The stock market continues to be rocked as investor sentiment waivers and economies brace for a global recession. 

The impact of the slowing global economy has already been seen in Singapore’s economy. The FTSE Straits Times Index (STI), which tracks the performance of the top 30 company stocks listed on the Singapore stock exchange, has been in the red for the last 1 year. In the last month alone, it has fallen from the highs of 3,218 to its current levels of 3,018, which is a fall of 200 points. 

This fall in stock index prices is aligned with the global sell-off seen in the last few weeks. The sell-off continues despite Singapore announcing a generous budget package and that Singapore’s ministers will be taking a 1-month pay cut

Businesses in Singapore may take drastic measures to further cut back on their expenses, especially for industries that have been most affected like Tourism and Hospitality.

There may continue to be further volatility in the stock market in the next few months. It is important to ensure that your financial portfolio is well-diversified as you weather the present storm.

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