Study on the Macro economics of the Flu in Germany.
General Effect on The World:
Covid is a piece of a group of infections which causes contaminations and illnesses in creatures. But COVID-19 is a new virus from the family of Coronaviruses which has infected humans, and this causes cold like symptoms.
COVID-19 is different to SARS and MERS regardless of them being from the same family. 80% of the people who have been affected by this virus suffer from a mild infection. This virus also causes dry cough, shortness of breath, aches and pains, sore throat etc. There are many people who don’t display symptoms of this virus making it harder for people to control.
Just 20 per cent of the COVID cases are regarded to be severe and the mortality rate is around 0.7 per cent to 3.4 per cent considering the geographic location and access to good health care. Even though the source of this virus is still unknown there are many versions of how this outbreak has started. According to wired.co.uk which is a magazine that reports the effects of science;
Virologists from the Wuhan Institution for Virology released a paper which says that the virus is made up of 96 per cent to that coronavirus that generally found in bats. But an unpublished study demurs this paper and says that coronavirus which is found in pangolins are 99 per cent similar to that of humans.
It is also said that there are cases of COVID-19 which has appeared to infect people who are not even linked to the Wuhan market.
There are now around 6,00,000 cases around of the world with around 30,000 deaths and 1,30,000 people recovered from it, in the present The United States of America is the worst affected country with over 1,00,000 cases and 1,700 deaths and Italy coming second with 86,500 cases and 9,100 deaths,
The measures which almost every country has taken to curb the spread of this deadly disease is social distancing or self-quarantine, every country has made sure that the working of public transport is limited only to a few hours, and almost every company in the world has introduced travel restrictions and switched to working from home.
Effect of Trade In The Future:
According to a survey by Statista which was published in 2019 Germany was ranked second after China in the highest trade surplus in 2018. Trade surplus means the amount of money where a country’s exports exceed the cost of its imports.
Higher trade surplus indicates that there is a high demand for the country’s goods in the world economy which increases the price of the country’s goods hence, strengthening that country’s currency.
It means that Germany is a country whose economy is greatly dependent on exports, or you can also say that Germany is export driven.
In any kind of a situation, good or bad there will be people or companies that are either benefitted or affected by the situation prevailing.
Synopsis
The companies which has a positive impact are TeamViewer which is a Stuttgart based company that offers video conferencing solutions. This company has benefitted a lot due to the virus as everyone has turned to video conferencing to get their work has done so TeamViewer got a lot of customers from different countries as well.
There are many insurance companies like Allianz which are pleased with their broadly diversified businesses model and their products which will be in demand regardless of the situation they are in.
Allianz’s ‘epidemic risk solution’ branch saw a very sharp increase in the demand.
The Frankfurt based Kion group which manufactures industrial trucks in Europe and is a global leader in automated technology.
It has branches all around the world. This company firmly believes that it production and delivery backlogs due to this virus and can be made up in the coming year.
The company which have already lost or felt the negative effects of the crises are, Lufthansa Group.
This group is Germany’s largest airline industry and if it is combined with its subsidiaries it can be the second largest airline in all of Europe in terms of passengers carried.
The company has already implemented shortened working hours but the actual crisis for them is to keep all employees in their company as it does not have the financial power to pay its employees so it started to offer its employees to use the ‘voluntary individual personnel measures’ which has unpaid leaves and also has an advance on annual leaves including the increase in part time work. It has already cancelled the payments of dividends to its shareholders to ensure the solvency of the company.
Data analysis and Stats
It is also taking out additional loans and is putting its aircrafts as collateral. It is also said that if this continues Lufthansa will be looking for government aid. After the crises subdues there will still be people hesitant to travel to in the short run but in the long run Lufthansa can turn their tables around provided, they last that long. This is not only the case with Lufthansa but with every airline company in the country.
Trump the president of The US has said that there is a restriction on passage for each European resident into the country. USA is in the top spot for Germany’s export, but it still will not affect the trade of the German companies as almost every company has a local office in USA like the large companies like Siemens, Volkswagen, Allianz etc.
For example, a medium sized German company called BHS which is from Weiherhammer generates around third of its revenue from USA, so it maintains a production site, service and installation branch in the country.
Conclusion
There are many branches of the German companies in China too as China occupied the top spot for exporting goods to Germany which means Germany imports the most number of goods from China. Volkswagen said that most of its units in China have started producing again but at a lower level due to the low customer demand. The plants are working because of the logistics chains and purchasing departments are working but not at the usual frequency.