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Current key figures: Economic policy
effects of the corona virus

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News March 31, 2020

COVID-19: Strategic Proposal & Unstatistics of the Month now available in 8 languages

The corona virus poses major challenges for the health care system and the economy in all European countries.

The RWI – Leibniz Institute for Economic Research in Essen, Germany, published two papers on the corona issue last week. One deals with the correct statistical classification of the prevalence rates and case numbers as well as the pitfalls of country comparisons. The other paper describes a possible exit strategy for the time after the lockdown in Germany.

Breaking infection dynamics, society back to normal (8 languages) Corona pandemic: Statistical concepts and their limits (8 languages)
 

Chart 1: Motor Vehicle Production in South Korea

Chart 2: Retail sales in South Korea dropped

  • South Korea is often seen as an example how the Corona crisis can be curtailed without a lock down of the economy. However, incoming data show that the country also will also face a recession. Production of motor vehicles - a key industry - fell sharply in February. (Chart 1)
  • Consumption expenditure also declined. Retail sales dropped by almost 5 per cent against the previous year. (Chart 2)
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News of 25 March, 2020

Breaking infection dynamics, society back to normal

Three prerequisites for large-scale tests and targeted isolation

A plea by Boris Augurzky and Christoph M. Schmidt, RWI, March 30, 2020

An article by Boris Augurzky and Christoph M. Schmidt (PDF, german) An article by Boris Augurzky and Christoph M. Schmidt (PDF, english)
 

Tweet of 19 March 2020

Chart 1: Weekly Car Sales and Registrations in China

 
Corona impact on german economy - Press Release 19 March 2020 (german only)
  • First signs of a revival of economic activity in China: Car sales were up for the fourth week in a row. However, it still takes long to get back to normal.
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Tweets of 18 March 2020

Chart 1: Container Throughput in Asian Ports

  • In Shanghai, container throughput in February was down by 20 per cent. At the same time, Hong Kong (for the first time since two years) and Singapore showed an increase. (Chart 1)
  • My reading: Hitherto, imports and exports were dampended primarily by port facilities. Because mobility was resticted, workers to load or discharge containers were missing in Chinese ports. In Hong Kong and Singapore were no such restrictions.
  • Therefore, vessels were partly re-directed to these ports. The decline of external trade due to reduced production is still to come.
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Tweet of 17 March 2020

 

Tweet of 16 March 2020

Chart 1: Tourist Arrivals in Hong Kong

Chart 2

Chart 2: Industrial Production in China

Chart 1
  • China's industrial output fell by about 13% in the months January and February against the previous year. Due to Chinese new year, only data on the average of the two months are published. (Chart 1)
  • Allthough the number of Covid-19 cases in HongKong has been small hitherto, the economic consequencies are desastrous. The number of Tourist arrivals, which have already declined in the 2019 due to the protests, were down by 95% in February. (Chart 2)
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Tweet of 12 March 2020



Chart 1: Car Production in China


Chart 2: Weekly Car Sales & Registration in China


Chart 3: Steel Production in China


Chart 4: Stored Steel in China

  • In the Chinese automotive industry, production lines were almost at a standstill in February. Production was 80 percent below the level of the same month last year. (Chart 1)
  • Car sales in the first week of March indicate that the chinese car market has not yet picked up. (Chart 2)
  • This has consequences for Germany: Firstly, China is an important export market - 12 percent of German passenger car exports went to China in 2019. Secondly, the locations of german companies are also affected by the decline. This puts pressure on the profits of the german car industry.
  • The Chinese steel industry is also increasingly suffering from the corona crisis. It is an important supplier to the automotive industry and the construction industry, which is important in China, and is therefore close to the pulse of the Chinese economy.
  • In February, steel production declined. On average, only 1.8 million tonnes per day were produced in the second half of February (Chart 3). This is about nine percent less than the annual average for 2019.
  • At the same time, the reduced production could not be completely sold off. As a result, the steel warehouses were better filled than ever before at the end of February (Chart 4).
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Tweet of 09 March 2020

China reported data on exports and imports in February. Exports were down by 17 per cent and imports by 4 per cent. However, the data require some interpretation. Different from the past, only aggregate data for the months January and February were published.

For exports, the impact of COVID-19 can be expected having been limited in January. The situation aggravated around January 20th. On January 25th New Year celebrations started. During New Year, economic activity is low, anyway. Thus, the decline mostly took place in February.

The decline of imports was small, because many goods were already on their way to China, when the COVID-19 situation aggrevated. Thus, the figures do not reflect the decrease of China's demand for imports, yet.

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Tweet of 05 March 2020

Car sales indicate well the sentiment of consumers. In China, they were close to nil in February. This shows the extent normal economic activity is disrupted by the coronavirus and policy's reaction on it.

It remains to be seen whether the slight increase of sales towards the end of February indicates a step towards nomalization.

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Tweet of 03 March 2020

Vietnam is not the most important destination for tourists in East Asia but the first to report data. February tourist arrivals indicate, how the economic consequences of COVID-19 spread to the entire region. They were down by more than 20 per cent.

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Tweet of 02 March 2020

The Purchasing Managers’ Index is the first economic indicator for China that fully covers the period after the COVID-19 outbreak. In January, it was somewhat above 50, showing that the economy was still growing at the beginning of the month, when the data were collected.

In February, it exhibits the strongest decline ever observed in China. In the service sector, it fell to 30.1, in manufacturing to 35.7. Both indicate a strong contraction of economic activity.

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