Work resumption in China raises hope for virus-hit European economies

As the new virus continues with its rampage worldwide, the European continent has started to feel the toll the novel coronavirus has taken on its economy.

In major economies such as Germany, France, Britain and Italy, economic outlook seems to have become grim as people fear for disruptions in supply chains and volatility in markets.  Nonetheless, many businesses sound a positive note as more and more Chinese workers have been back to factories, and enterprises, including foreign-funded ones, have resumed operation.

As of Saturday, there have been more than 40,000 confirmed cases in 42 European countries, among which Germany has reported 3,795. 

The German industry, which has already shown first signs of weakness amid the spreading coronavirus, is now “threatened by the longest recession since reunification,” the Federation of German Industries warned, pointing out a direct connection between the economy’s downward trend and the spread of the virus. 

“The coronavirus and its worldwide distribution currently have the greatest negative impact on the economic development in Germany,” showing how “vulnerable” the export-oriented German economy is,” it said.

In Italy, Europe’s worst-hit country which has confirmed 17,750 cases by Saturday, economists believed the disease will blow the economy hard this year, with the 0.6-per cent growth target out of reach. 

“Given the context, the full-year data for 2019 are a positive development. But it won’t be enough for the economy to survive the blows from coronavirus,” Massimo Baldini, professor of economic science at the University of Modena and Reggio Emilia, told Xinhua. 

“We don’t know yet how big the economic problems will be, but it will be significant,” said Baldini.

As of Saturday, the number of infections in France has reached 4,500. The Bank of France has reduced the country’s expected economic growth rate in the first quarter from 0.3 per cent to 0.1 per cent due to the spread of the virus. 

The epidemic has a “serious impact” on the French economy, the country’s Economy and Finance Minister Bruno Le Maire said earlier this week, adding the growth rate may fall below 1 per cent this year from a previous prediction of 1.3 per cent. The turnover of hotels and catering industries has fallen sharply, and the automotive and aviation industries have also been structurally affected, he said. -Xinhua

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