Nations increasingly fearful of coronavirus pandemic and resulting global recession

The hope that the coronavirus would be confined to China disappeared on Friday as infections spread rapidly around the world, countries began stockpiling medical supplies, and investors fled in anticipation of a global recession.

Stock prices were on track for the worst week since the 2008 global financial crisis, as virus disruptions in international travel and supply chains fueled fears of a recession in the United States and in the euro area.

The US stock market fell into corrective territory with the benchmark S&P 500 down more than 4% on Thursday, prolonging a market rout that has now cut its closing high on February 19 by more than 10%.

“The markets are voting and saying they think the United States is in a recession,” said Chris Rupkey, chief economist at MUFG in New York.

“And frankly, at this point, after the slowdown in travel plans related to the coronavirus that has broken down the global supply chain, it will be a miracle if we avoid a recession.”

Mainland China – where the virus appeared late last year – reported 327 new cases on Friday, the lowest since January 23.

But with new infections reported around the world now surpassing those in China, the director general of the World Health Organization (WHO), Tedros Adhanom Ghebreyesus, said that even wealthy countries should prepare.

“No country should assume it won’t get a case, it would be a fatal mistake, literally,” said Tedros, pointing to Italy, where 17 people died in Europe’s worst epidemic.

A Reuters count showed that nearly 10 countries have reported their first cases of the virus in the past 24 hours, including Nigeria, the most populous country in Africa and the first case in sub-Saharan Africa.

US investment bank BofA has lowered its global growth forecast to the lowest level since the peak of the financial crisis, and rating agency Moody’s has said that a coronavirus pandemic will trigger global and US recessions during of the first semester.

Medical storage

In addition to stockpiling medical supplies, governments have closed schools and canceled large rallies, including sporting events, to try to stop the spread of the flu disease known as COVID-19.

The administration of US President Donald Trump was considering invoking special powers to rapidly increase US production of protective equipment, two officials told Reuters.

In Europe, the number of cases reported in France has doubled, Germany has warned of an impending epidemic and Greece, the gateway for refugees from the Middle East, has announced increased border controls.

“We have a crisis before us. An epidemic is underway,” said French President Emmanuel Macron.

The number of people who tested positive for the disease in Italy increased from more than 200 to 650. Germany has around 27 cases, France around 18 and Spain 15.

Tedros told reporters in Geneva that Iran, Italy and South Korea are at a “turning point” in their efforts to prevent a larger epidemic.

US investment bank BofA has lowered its global growth forecast to the lowest level since the peak of the financial crisis, and rating agency Moody’s has said that a coronavirus pandemic will trigger global and US recessions during of the first semester.

Known unknowns

Japan is particularly concerned about a case where a woman has tested positive for the virus for the second time. Second positive tests have also been reported in China and may imply that the disease does not confer immunity.

Scientists have warned that much remains unknown about the virus, including how long it can survive on surfaces.

Hong Kong quarantined a pet dog from a coronavirus patient after he showed “weak positive” results for the virus, even though he had no symptoms. Other tests will be done to confirm if the dog has been infected.

Director of the U.S. Centers for Disease Control and Prevention (CDC), Robert Redfield, said the agency was evaluating the length of time that the coronavirus could be infectious on surfaces.

“On copper and steel, it’s pretty typical, it’s about 2 hours,” said Redfield during a hearing before the House of Representatives. “But I would say that on other surfaces – cardboard or plastic – it’s longer, and so we’re looking at that.”

He said infections from the surface rather than from the air could have contributed to the epidemic on the Diamond Princess cruise ship in Japan, where about 700 passengers and crew members contracted the disease.

The future of the Tokyo Olympics

Japan is slated to host the 2020 Olympics in July, but WHO emergency program manager Dr Mike Ryan said discussions are underway with organizers on whether to continue.

The coronavirus has wreaked havoc in global aviation and tourism, with airlines canceling flights, countries banning hot spot visitors and nervous passengers postponing travel.

California-based Facebook Inc. has announced that it will cancel its annual developer conference and Microsoft Corp has followed suit by withdrawing from a games conference scheduled for next month.

Ryan, of WHO, said the Iran epidemic could be worse than expected. He suffered the highest number of deaths outside of China, with 26 dead, suggesting that there are probably far more cases than the 245 reported, including some senior officials.

US intelligence agencies are monitoring the global spread of coronaviruses, including in Iran and India where only a few cases have been reported, sources familiar with the matter said.

So far, the virus has mainly hit China, causing nearly 80,000 infections and nearly 2,800 deaths, according to official Chinese figures. It has spread to 46 other countries, where around 3,700 cases and 57 deaths have been reported, according to WHO.

There is no cure for coronavirus, which can lead to pneumonia, and a vaccine can take up to 18 months to develop.