Covid-19 briefing

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- ECONOMIC IMPACT -

Latest update: 21 October 

Many economists have cut their GDP forecasts. The 2020 consensus forecast for GDP growth is currently negative and many predict a recession.

World Trade Organization forecasts the volume of world merchandise trade to shrink by 9.2% in 2020 followed by an estimated rise of 7.2% in 2021.

-4.4%

IMF has revised its 2020 global GDP forecast to -4.4% from an estimate of -4.9% made in June.

5.3%

The global economy is estimated to contract by 4.2% in 2020 and bounce back by 5.3% in 2021.

Impact of Covid-19 on equity indices

- SECTOR IMPACT: Travel and tourism -

Latest update: 21 October 

International travel impact

36

Travellers from 36 European countries with a valid residence permit can now apply for Chinese visas at any Chinese embassy within these countries (12 August)

1,000

After resuming flights with China, Japan envisages allowing 1,000 business travellers, student and foreign residents to enter per day. (24 September)

Country Focus

The UK, the Netherlands, the Czech Republic and Belgium have been added to Italy's list of high-risk countries. Covid-19 tests are mandatory for travellers from these nations (7 October). 

In Canada, travel restrictions on international travellers has been extended until 31 October (29 September) but borders have been opened for extended family members of Canadians from 8 October onwards (2 October). 

Japan is to lift overseas travel restrictions to 12 countries including China, Australia, South Korea, Malaysia and Taiwan among others by next month (9 October).

Russia has resumed flights with Serbia and Cuba from 15 October, with South Korea from 27 September, and with Belarus, Kyrgyzstan and Kazakhstan from 21 September (19 September).

Key travel and tourism market developments

The travel tourism industry has so far not seen the kind of turnaround it was hoping for in the early stages of H2. The busy holiday period initially offered great hope, but confusion over ever-changing travel corridors and increasing infection rates in Europe have checked momentum.

Airlines had originally started to increase capacity, but in light of reduced demand, Ryanair has announced it is scaling back capacity in September and October. easyJet has pulled out of three UK hubs, while Southwest airlines has announced a significant pullback of flights in October.

The recent surge in new cases in Europe has led to significant changes with regards to travel corridors and the UK's decision to impose quarantine on arrivals from Spain, France and Croatia has heaped more pain on operators.

Despite all the gloom surrounding the industry at present, Airbnb last week submitted a draft registration to the Securities and Exchange Commission for an initial public offering.

Many are predicting a blockbuster IPO as the short term rental market bounces back quicker than traditional hotels, thanks to its natural lean towards social distancing.