Grev Turegatan 18, 114 46 Stockholm
+46 70 5396570
info@jonasflorinus.com

Economic outlook summary (Coronavirus update)

Economic outlook summary (Coronavirus update)

Economic outlook 2020

The Coronavirus mortality rate is 2.8% vs. 0.1% for a normal pneumonia and the virus has killed 2,100 people and infected more than 75,500 since December.

Nov 2002 to July 2003, Sars, also caused by Corona, spread to 37 countries infecting 8,000+ people, killing more than 750. The new Coronavirus has killed nearly 3x as many people in 8 weeks as Sars did in 8 months causing concern for global economy. During Sars China economic growth declined from 11.1% 2003/Q1 to 9.1% 2003/Q2-Q4.

Consumer and B2B demand are likely to be somewhat effected 2020 – 21. The big hit to business however is production, logistics and travel. Manufacturers are already reporting supply chain challenges.

The next 2 – 4 weeks is important but 2020 – 21 will see a prolonged and deeper economic slowdown.

US Dow dropped more than 1,000 points Monday 25 Feb on multiple Coronavirus news and economic slowdown worries. The 3rd worst daily drop in history

How does this effect business? There is a need for supply chain reviews, amongst other. Regional sourcing and production independencies, that took off on the back of US war on international trade, is a wise strategic move. Cash flow and profits will take a hit, so will valuation realities in the M&A space.

Long-term, technology shifts and the vast amounts of available capital indicate strong continued economic growth.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

17 + five =