The week ahead may be pivotal for investors and businesses monitoring the deadly coronavirus outbreak — including Irish companies whose supply chains stretch into China — as they scramble to understand whether the economic fallout will be long-lasting.
For Ireland, the focus is the large number of leading pharma companies that have bases here and which rely on China for ingredients to make medicines for the US and other world markets, said John Whelan, an expert on supply chains and global trade. The Irish Examiner columnist said the Chinese city of Wuhan — the epicentre of the new coronavirus strain, labelled Covid-19 — is a huge producer for the world’s pharmaceutical industry, making antibiotics, common drugs, and painkillers for the global supply chain.
The extent to which Irish facilities will be affected is open to debate, but Mr Whelan said that a prolonged shutdown of Chinese pharma factories could affect the world supplies of the ingredients that go to produce medicines that treat breast and lung cancers.
Robert Kadlec, assistant secretary at the US Department of Health and Human Services, said, last week, there could be “chiling implications” for global supply chains that start in China.
Pfizer, GSK, and Mylan — which have substantial facilities in Ireland — have said that their global supply chains haven’t been disrupted, but they continue to monitor the outbreak.
Yesterday, the IMF said it was sticking with its assessment that the fallout from Covid-19 will only slightly slow world economic growth this year. “But we are also looking at more dire scenarios, where the spread of the virus continues for longer and more globally, and the growth consequences are more protracted,” its managing director, Kristalina Georgieva, told the gathering of finance ministers and central bankers in Riyadh.
She said the IMF supported China’s action to pump money into its banking system and to increase public spending.
“Global cooperation is essential to the containment of the Covid-19 and its economic impact, particularly if the outbreak turns out to be more persistent and widespread,” she said.