Outbreak starts to look more like worldwide economic crisis
Effort to halt spread of illness threatens paychecks, profits
NEW YORK — The coronavirus outbreak began to look more like a worldwide economic crisis Friday as anxiety about the disease emptied shops and amusement parks, canceled events, cut trade and travel and dragged already slumping financial markets even lower.
More employers told their workers to stay home, and officials locked down neighborhoods and closed schools. The wide-ranging efforts to halt the spread of the illness threatened jobs, paychecks and profits.
“This is a case where in economic terms the cure is almost worse than the disease,’’ said Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics. “When you quarantine cities ... you lose economic activity that you’re not going to get back.’
The list of countries touched by the illness climbed to nearly 60 on Friday as Mexico, Belarus, Lithuania, New Zealand, Nigeria, Azerbaijan, Iceland and the Netherlands reported their first cases. More than 83,000 people worldwide have contracted the illness, with deaths topping 2,800.
The head of the World Health Organization announced that the risk of the virus spreading worldwide was “very high,” citing the “continued increase in the number of cases and the number of affected countries.”
The economic ripples have already reached around the globe.
Stock markets around the world plunged again Friday. On Wall Street, the Dow Jones index took yet another hit, closing down nearly 360 points. The index has dropped more than 14% since last week, making this the market’s worst week since 2008, during the global financial crisis.
But the impact was just as evident in the hush that settled in over places where throngs of people ordinarily work and play and buy and sell.
“There’s almost no one coming here,” said Kim Yun-ok, who sells doughnuts and seaweed rolls at Seoul’s Gwangjang Market, where crowds were thin Friday as South Korea counted 571 new cases — more than in China, where the virus emerged. “I am just hoping that the outbreak will come under control soon.”
In Asia, Tokyo Disneyland and Universal Studios Japan announced they would close, and events that were expected to attract tens of thousands of people, including a concert series by the Kpop group BTS, were called off. The state-run ExportImport Bank of Korea shut down its headquarters in Seoul after a worker tested
positive for the virus, telling 800 others to work from home. Japanese officials prepared to shutter all schools until early April.
In Italy, where the count of 650 cases is growing, hotel bookings fell, and Premier Giuseppe Conte raised the specter of recession. Shopkeepers like Flavio Gastaldi, who has sold souvenirs in Venice for three decades, wondered if they could survive the blow.
“We will return the keys to the landlords soon,” he said.
The Swiss government banned events with more than 1,000 people, while at the Cologne Cathedral in Germany, basins of holy water were emptied for fear of spreading germs.
“It’s not cholera or the black plague,” said Simone Venturini, the city councilor for economic development in Venice, Italy, where tourism already hurt by historic flooding last year has sunk with news of virus cases. “The damage that worries us even more is the damage to the economy.”
Europe’s economy is already teetering on the edge of recession. A measure of business sentiment in Germany fell sharply last week. China is a huge export market for German manufacturers. Weaker business sentiment could lead companies to postpone their investment and expansion plans.
In the U.S., online retail giant Amazon said Friday that it has asked all of its 800,000 employees to postpone any non-essential travel, both within the country and internationally. Officials at the Food and Drug Administration said a U.S. pharmaceutical company was dealing with a shortage of one of its drugs, because production of a key ingredient had been disrupted in China. They would not identify the company or the product.
The chairman of the Federal Reserve, Jerome Powell, said that the U.S. economy remains strong, but that policymakers would “use our tools” to support it if necessary.