Paul Donovan, the Chief Economist of UBS Global Wealth Management, analyzes the implications in the near and long-term for the economy caused by the coronavirus.
“If consumers are afraid (whether rational or not), they may spend less in the short term. If that happens, it hurts the global economy.”
“Home working has increased with the virus. Once employers and staff discover that home working works, it may become more common. Online consumption of entertainment and some goods has also increased with the virus. As with home working, once people change their habits they rarely change back.”
“There are lots of economic implications. Transport and logistics will change. Demand for investment goods may rise (building local production). Demand for office and retail real estate could fall. The more important disruptions from the virus may lie in the long term.”