Coronavirus threatens global economy as experts warn no country will be spared

All countries need to prepare to combat the coronavirus, the World Health Organization said on Thursday, as authorities raced to contain the epidemic’s rapid global spread and Wall Street looked set for its biggest weekly fall since the 2008-2009 financial crisis.

With new infections reported around the world now surpassing those in mainland China, World Health Organization (WHO) Director General Tedros Adhanom Ghebreyesus said even rich nations should prepare.

“No country should assume it won’t get cases, that would be a fatal mistake, quite literally,” Tedros said, pointing to Italy, where 17 people have died in Europe’s worst outbreak.

In addition to stockpiling medical supplies, governments ordered schools shut and cancelled big gatherings, including sports events, to try to halt spread of the flu-like disease known as COVID-19 that emerged in central China more than two months ago from an illegal wildlife market.

The death rate appears to be around 2 percent, although it could be lower if there are many mild, undiagnosed cases, experts say.

By comparison, seasonal influenza has a case fatality rate of around 0.1%, said Anthony Fauci, Director of the U.S. National Institute of Allergy and Infectious Diseases, ahead of a meeting with Vice President Mike Pence, who has been put in charge of coordinating the U.S. response.

“So therefore you have somewhat of a serious potential for morbidity and mortality,” he said, adding, “We’re dealing with a serious virus.”

There is particular concern over a case in Japan in which a woman tested positive for the virus for a second time. Second positive tests have also been reported in China and could imply contracting the disease does not confer immunity. Scientists warned that much remains unknown about this new virus.

The head of the WHO’s emergency program, Dr. Mike Ryan, said discussions were being held with organizers about the fate of the 2020 Olympics, scheduled for July in Tokyo, although no decision was expected soon.

Their cancellation or relocation would be a massive blow for Japan, which said it was closing its entire school system for the next month in a bid to prevent spread of the virus.

The virus has so far mainly battered China, causing nearly 80,000 infections and more than 2,700 deaths, according to WHO figures. It has spread to another 46 countries, where around 3,700 cases and 57 deaths have been reported.

“This virus has pandemic potential,” Tedros told reporters in Geneva. He said Iran, Italy and South Korea were at a “decisive point,” but still short of sustained community transmission.

MARKET SELLOFF

Spooked by the impact on China, the heart of corporate supply chains, and the increasing effect on other countries, stocks sank deeper into the red on Thursday and oil prices fell.

Global equity markets have dropped for six straight days, wiping out more than $ 3.6 trillion in value .MIWD00000PUS.

The S&P 500 .SPX finished 12% below its Feb. 19 record close, marking its fastest correction ever in just six trading days, while the Dow registered a record one-day points drop, which was also its fourth 1,000-point decline in history and the second this week.

Jeremy Farrar, a specialist in infectious disease epidemics and director of the Wellcome Trust global health charity, urged finance institutions to commit an initial $ 10 billion funds to fighting the virus.

“What we are really missing is tangible, high-level funding and support from global financial institutions,” he said in a statement. “The possible impact of this coronavirus is far beyond a health emergency – it’s a global crisis with potential to reach the scale of the global financial crisis of 2008.”

Traders are betting the U.S. Federal Reserve will move aggressively to cut borrowing costs in coming months in response to the effects of the coronavirus on the economy.

Politicians are also scrambling to respond.

President Donald Trump’s administration was considering invoking special powers to rapidly expand U.S. production of protective gear, two officials told Reuters.

California’s governor complained that the state was monitoring over 8,000 people but had only 200 test kits.

President Emmanuel Macron attempted to rally the nation as France’s number of reported cases doubled.

“We have a crisis before us. An epidemic is on its way,” Macron said.

Germany, too, has warned of an impending epidemic. And Greece, a gateway for refugees from the Middle East and beyond, announced tighter border controls.

There is no cure for the coronavirus, which can lead to pneumonia, and a vaccine may take up to 18 months to develop.

MISINFORMATION ‘EPIDEMIC’

Iran extended closures of cinemas, cultural events and conferences for another week and called off Friday prayers in some cities.

The WHO’s Ryan said Iran’s outbreak may be worse than realized. It has suffered the highest death toll outside China, with 26 dead, suggesting there are likely many more cases than the 245 reported, which includes some senior officials.

Italy, desperate to stave off a probable recession, warned that an “epidemic of misleading information” could do worse harm than the virus itself.

The coronavirus has played havoc with global aviation and tourism as airlines cancel flights, countries ban visitors from hot spots and nervous passengers put off travel.

Chinese authorities said the number of new deaths there stood at 29, its lowest daily tally since Jan. 28. There were 439 new cases in mainland China as of Thursday, the WHO said, compared to 746 elsewhere.