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The Economist: The Right Medicine For The World Economy - No.10 - 7th Mar 20

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On The Economist No.10: The right medicine for the world economy 


The right medicine for the world economy


It is not a fair fight, but it is a fight that many countries will face all the same. Left to itself, the covid-19 pandemic doubles every five to six days. When you get your next issue of The Economist the outbreak could in theory have infected twice as many people as today. Governments can slow that ferocious pace, but bureaucratic time is not the same as virus time. And at the moment governments across the world are being left flat-footed.


The disease is in 85 countries and territories, up from 50 a week earlier. Over 95,000 cases and 3,200 deaths have been recorded. Yet our analysis, based on patterns of travel to and from China, suggests that many countries which have spotted tens of cases have hundreds more circulating undetected (see Graphic detail). Iran, South Korea and Italy are exporting the virus. America has registered 159 cases in 14 states but as of March 1st it had, indefensibly, tested just 472 people when South Korea was testing 10,000 a day. Now that America is looking, it is sure to find scores of infections—and possibly unearth a runaway epidemic.


The White House kicks out journalists working for China’s state media


On March 2nd, less than two weeks after China expelled three journalists for the Wall Street Journal, the State Department announced that it was placing a cap of 100 on the number of Chinese citizens who could be employed in America for five state- and Communist Party-owned media organisations—a reduction from their current total of 160. The cap, effective from March 13th, means that up to 60 Chinese nationals will be forced to leave, a diplomatic swipe that adds a new tension to the relationship.


Covid-19 risks tipping Germany and Italy into recession


Bad weather, trade war, changes to car-emissions testing, and low water levels in the Rhine: since 2017 Europe’s economy has been struck by a number of shocks, none of which hapless finance ministers or central bankers could control. Last year euro-area gdp rose by only 1.2%. Germany and Italy, which as big manufacturers were most exposed to America’s trade war with China, sank to the bottom of the zone’s growth rankings.


Now covid-19 is spreading across the continent. Over 3,000 cases have been confirmed in Italy, and more than 200 each in France and Germany. Responding to the outbreak falls to health authorities. But the virus also deals the economy a big blow.


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