Currently, many people have questioned which economy will suffer the most serious damage this year due to the Covid-19 epidemic? This will firstly depend on the local disease situation, as well as on the import-export market. Later, other dominant factors included the ability of the government to control the epidemic, the policy of the central bank, etc.
In early April, economists from JP Morgan – one of the oldest financial services firms in the world – made weekly forecasts about the prospects of many economies in the world. And here are the economies that are most at risk of being sagged by disease.
Mexico
(Photo: AP)
Mexico’s GDP growth rate could be -7% this year, the worst situation according to JP Morgan’s forecast. Earlier, Mexico was expected to grow by 1.5%. Thus, the country can “lose” up to 8.5% of GDP growth rate due to epidemics, becoming the economy most severely damaged.
One of the main reasons is due to geographical location. Mexico is heavily dependent on the United States, while the United States is a global epidemic, witnessing rising unemployment and hastily closing borders. The flag nation itself is forecast to lose 5.3% of GDP growth rate, becoming the 4th largest economy to suffer losses after the epidemic.
Not to mention, the Covid-19 epidemic in Mexico has not yet intensified, currently there are more than 2,000 cases but the situation is more serious. Mexico may suffer the first shock from the influence of the United States, then have to close business operations to prevent the epidemic in the near future. Two double shocks make it difficult for the country to hope for a stable economy.
South Africa
(Image: Reuters)
South Africa’s growth rate may also be -7% this year. However, before the outbreak, South Africa was only forecast to increase by 0.7%, implying that the disease did not strike as strongly on the economy as with Mexico.
Currently, almost half of South Africa’s economy has been frozen during a blockade. After that, the recovery process will also be very painful. The poor national financial situation has caused Moody’s to lower its credit rating, making it harder for the South African government to borrow to revive the economy after the crisis.
New Zealand
(Image: Getty)
Kiwi country started in 2020 with economic expectation of 2.4% growth, but the blockade erased that beautiful prospect. New Zealand is forecast to have a GDP growth rate of -4.8%, which means a loss of 7.2% due to the Covid-19 epidemic.
The situation of New Zealand is similar to Australia – the country is expected to suffer the 5th largest economic loss. Both countries have strong exports to Asia, with New Zealand being a high-class fruit, and Australia being a mining industry with a large Chinese market. So when an outbreak in Asia caused a drop in demand, New Zealand and Australia suffered severely.
As mentioned above, JP Morgan ranked the US and Australia in fourth and fifth place respectively in terms of economic losses due to the epidemic. And the country in 6th place is …
Thailand
Throbbing path in Phuket, Thailand closed in blockade (Image: Bangkok Post)
The Southeast Asian nation was once expected to grow by 2.8%, but by this time it is forecast to be -3.3%. Accordingly, the difference is 6.1%.
Thailand is the leading tourist destination in the world, so the blockade of a number of countries in the world (especially China) has put the tourism industry of the Golden Temple under great pressure. There are about 40 million visitors to Thailand every year – this figure has doubled compared to the previous decade, and shows the importance of the tourism industry to the national economy.
Even when the epidemic is over, countries will hesitate to lift their ban on international travel. Moreover, customers will also have the psychology of tightening their pockets and afraid to fly long distances. Therefore, the Thai economy is also difficult to recover quickly.
JP Morgan forecasts that the 10 economies will experience the biggest percentage point decline in economic growth: Mexico> South Africa> New Zealand> USA> Australia> Thailand> Spain> Colombia> Norway> Brazil.
Spain
Spain and Italy are also forecast to have a GDP growth rate of -4% this year. However, the gaur economy has suffered a stronger blow. Because before that, Spain is expected to grow significantly.
Both countries are epidemic centers of Europe, with a high number of infected and fatalities. Prolonged blockades also rocked the economy – in which the service and tourism industries were in the most crisis.
The lack of support from European countries (for Spain and Italy) will not only stop at the health crisis, it can also turn into political tensions and lead to the brink of recession of Monetary union.
(Source: Telegraph)