Addis Ababa Medical College – Hargeisa Branch

In Europe

July 30th, 2021

It is clear that there are certain sectors that will be affected globally. One of them is the tourism sector and the sectors linked to this, such as the hospitality industry. Looking for the view of the markets, I see that they have anticipated the impact of the epidemic on certain commodities. The advance of flu is beating, for example, oil and soybeans and corn prices. The fall of the price of oil is due to fears that the epidemic affects air passenger transport, which would impact on a fall in the demand for fuel, while the fall in the price of agricultural commodities has been observed mainly in those used as food for pigs (soybean and corn have been most affected since they are used for this purpose). I think that not only should focus the attention of the effect of the epidemic on the fall of demand in certain sectors, but also closely follow how this can impact on the health of the companies that compose it since it can trigger a wave of bankruptcies with effects that go beyond these sectors in particular.

For companies is not a good time to receive a reduction of the demand, which already is weakened by the global crisis by itself. The situation is more complex still when we remember that the international financial sector is not able (or willing to) financially assist companies which increases their risk of falling into insolvency. So far I have not seen much discussion about the effect of the epidemic on the pace of recovery of the global economy. Even caught my attention the optimism that is maintained both in the U.S. and in Europe. In Europe, consumers and entrepreneurs are better mood and this was reflected in the indicator of economic sentiment (ISE) of the month of April that elaborates the EU Executive.