Global lockdown: Economies under siege

Since we talked about coronavirus epidemic in our February cover story, the outbreak has turned into a global pandemic over the past 30 days, pushing the world in an unprecedented period of crisis and uncertainty.

- Sumit Maitra

As we write this cover story, about 19 countries, India being the latest, are under lockdown, implementing forcible social distancing.

Indian economy, and social life, is under full lockdown for 21 days till April 14 even as 24 states had partially entered a lockdown till 31 March earlier.

That means most economic activities, from small businesses to large factories, have been severely impacted in these countries, most of which are either major resource exporters or consumers.

With no definitive treatment in sight and fatality rates continue to be high in countries like the UK and the USA, Italy and Indonesia, how long the lockdown would continue depends upon how affected countries and their local authorities manage and control the spread of the coronavirus.

Any missteps, as seen initially in China, and then in Italy and United States would only prolong the ordeal for the global population.

While China is now limping back to work, restarting its mines and factories and shopping malls, its connectivity to the most of the outside world would continue to remain broken preventing cargo shipments till the global lockdown continues.

China, where it all started, is the largest energy consumer in the world, accounting for more than 80 percent of global oil demand growth last year.

Oil prices have fallen continuously over four weeks, by about 60 percent since the start of the year to 18-year low with international benchmark Brent crude falling to $24.52 per barrel as on March 19.

Australian thermal coal prices declined in February by 2.9 percent on month to average $67.6/mt amid the impact of the Covid-19 outbreak in China.