The virus and its spread

The further course of the corona epidemic cannot really be predicted even by medical experts. On the one hand, the declining number of new infections in China in recent days has provided some relief at times, even if the influence of the different diagnostic methods is difficult to see through. On the other hand, South Korea now seems to have registered the first major corona outbreak outside China, which could increase nervousness again.

It is clear that the economic consequences of the corona epidemic will be considerable. This is true even if the disease is now actually on the retreat and a broad all-clear can be given in the first quarter. After all, the economic damage caused by the loss of production in factories, by disruption of supply chains, by limited consumption opportunities and by the loss of travel is already considerable, especially for China and the countries bordering on Asia.

Unfortunately, the possibility cannot be ruled out that the infection will spread beyond China’s borders and lead to a pandemic. Even if this is a rather unlikely risk scenario, it is certainly relevant given the considerable economic impact. In our analysis we conclude that in this case a global recession would have to be feared, which would result in sharp price losses on the equity markets. In our view, declines of 30 percent would be likely.


Rate this article

Thank you for your rating. Your vote:
There is no rating yet. Be the first! Current average rating: 0

Leave an answer

Your e-mail address will not be published. Required fields are marked *