Thousands of retirees on the Central Coast may see the impact of the corona virus showing up on their retirement account balances as share markets around the world went into free fall this week.
The Australian share market saw around $150 billion wiped off company valuations. As at 2:30pm on Thursday (February 27) the S&P/ASX200 Index was at 6,640, a slide of seven per cent over the week.
The falls follow similar declines in the United States and other major share markets around the world as fears grow over the spread of the Coronavirus outside of China. The largest falls were in stocks most directly impacted by travel bans and other economic disruptions in China, including Qantas, Flight Centre, Treasury Wines and several oil and gas stocks.
On Tuesday, the World Health Organization (WHO) warned countries around the world to ready themselves for the coronavirus to come
“knocking at the door.”
The Australian government has since activated its emergency response plan to an impending pandemic, foreshadowing fever clinics, fast-tracked vaccines and pressure on hospitals, blood banks and medical supplies.
From an economic perspective, the coronavirus is causing major disruptions to supply chains and the Australian economy is particularly exposed.
Our mining sector is reliant on China as an export destination, but our retail and manufactured goods sector is equally reliant on China for imported supplies. About 15 per cent of consumer goods imports, including 70 per cent of all our imports of clothes, furniture, iphones and car parts, come from China.
Uncertainty over the virus comes hard on the heels of the recent catastrophic bushfires and subsequent flooding events and has compounded concerns that Australia may slip into economic recession in the first half of 2020.
In recent weeks, the national unemployment report, home building approvals data and business capital expenditure surveys have all pointed to a possible contraction in domestic economic activity.
Ross Barry