MB113 Economics Assessment 1: Article Analysis Report

This report analyzes five articles related to economics, covering a range of contemporary issues. The first article examines potential job losses in Australia due to the coronavirus shutdown, focusing on the hospitality and entertainment sectors. The second article explores the impact of the coronavirus on Australia's economic growth, particularly its trade relationship with China. The third article discusses panic buying and its effect on Australia's food security. The fourth article examines the Australian dollar's decline and the stock market's fall amidst economic challenges. The fifth article summarizes the Saudi Arabia-Russia oil price war. Each section includes a summary of the article's content and a reflection on its implications, connecting the issues to broader economic principles and real-world scenarios. The report fulfills the requirements of an economics assignment involving critical evaluation and analysis of current events.

Running head: ARTICLE ANALYSIS
Article Analysis
Name of the Student
Name of the University
Student ID

1ARTICLE ANALYSIS
Table of Contents
1. Job losses from Australia’s coronavirus shutdown will be ‘devastating’....................................2
2. Australia’s growth outlook dims as China’s momentum falters amid corona virus outbreak.....3
3. Coronavirus is causing panic buying, but what does that mean for Australia’s food security....4
4. The Australian dollar hits lowest level since 2002, ASX extends fall........................................6
5. 5 Charts that explain the Saudi Arabia-Russia oil price war so far.............................................7
Reference.........................................................................................................................................9

2ARTICLE ANALYSIS
1. Job losses from Australia’s coronavirus shutdown will be ‘devastating’
Author: Anne Davies
The Guardian, 23rd March, 2020
https://www.theguardian.com/australia-news/2020/mar/23/job-losses-from-australias-
coronavirus-shutdown-will-be-devastating
Summary
The article speaks about the possible job losses in hospitality and entertainment industry
in Australia. Among largest employers in the hospitality industry in Australia, Crown Resorts is
in dilemma whether to lay off workers or stand them down with leaves or holidays. The
company employs around 18, 500 workers. Both the action have consequences if they lay off
then in future when they open again they will suffer from employee shortage as they have 4000
outlets that depend on these employees (Kickbusch and Leung 2020). The Australian Hotel’s
Association employs 250, 000 people and a shutdown of business would hurt the business as
well as the employees severely. As per the article, it is estimated that 1581 employment ions
already lost and consequently there is wage loss of around $1.3 million. Additionally, numerous
number of people employed in the entertainment sector like performing arts, television and many
more, who are in verge of job loss as well.
Reflection
Coronavirus is a contagious disease and it means that it will spread if there is more public
or social gathering. Places like gaming parlor, Movie Theater, restaurant and hotels are the
places where people from different places gather. Hence, possibility of spreading the disease

3ARTICLE ANALYSIS
from these area spread the most. Therefore, shutting down these places are the primary decision
for the government before going into complete lockdown. Shutdown of these places will result
into no revenue generation for the companies operating in this industry. Therefore, it will be hard
for them to keep workers in job for long time without any business. It is thus possible that
workers associated to the hospitality and entertainment industry go for lay off of workers if the
situation of coronavirus remains for long time (Binder 2020). It can be thus said that there will be
huge impact on the workers due to the outbreak of this contagious disease which is not just
taking people’s life but jobs as well. Hence, coronavirus is affecting both business and
employment sector of Australian economy.
2. Australia’s growth outlook dims as China’s momentum falters amid corona virus
outbreak
Author: Saheli Ro Choufdhury
CNBC, 27th February, 2020
https://www.cnbc.com/2020/02/27/coronavirus-outbreak-australia-economic-impact.html
Summary
The outbreak coronavirus has impacted economy of China and weakened its momentum
of growth. With fall in the business sector of China, it is obvious that its demand for good would
fall. The export sector of Australia is highly dependent on China since it is the largest trading
partner of Australia. In the article, it has been observed that in the December 2019 Australia’s
exports to China valued at 34% of the total export revenue earned from the concerned sector
(Ayittey et al. 2020). Additionally, many Chinese students study in Australia and due to the
outbreak they are returning homeland and thus the education sector is losing students. Further,

4ARTICLE ANALYSIS
tourism sector would be affected adversely because as per last year’s data it is observed that out
of 8.66 million visitors 1.33 million were from China. Thus, it is evident that with fall number of
tourist the revenue of the sector would fall that in return affect the economy of the country.
Reflection
Australia is an open economy and is highly involved in trade with other countries around
the world. It is thus obvious that the export sector of the country will suffer if any of its trading
partner faces economic adversities. The degree of impact on the export sector of Australia
directly depends on the intensity of trade occurs between the two countries. In case of China, the
problem is severe as 1/3rd of the export revenue of Australia comes from China and various
sector of Australia depends on the goods imported from China. The fall in demand from China
would lower the revenue from export sector and increases the supply of the goods exported to
China in the domestic market. Hence, there would be fall in price of goods in domestic market.
Hence, concerned would earn lower revenue. Consequently, the economy of Australia would
face a contraction and may lead to economic slowdown if this continues for longer period
(Leiva‐Leon, Pérez-Quirós and Rots 2020). Therefore, fall in export demand from China would
reduce the economy of Australia by 0.1% in the initial period but the condition may get worse.
3. Coronavirus is causing panic buying, but what does that mean for Australia’s food
security?
Author: Daniel Keane
ABC News, 6th March, 2020
https://www.abc.net.au/news/2020-03-16/coronavirus-is-not-a-threat-to-food-supply-experts-
say/12058412

5ARTICLE ANALYSIS
Summary
In the article. Author speaks about the impact of panic buying caused due to outbreak of
coronavirus on the food supply in Australia. The country has faced shortage of hand sanitizers
and toilet papers due to tis panic buying in the last few weeks. Now, the impact is upon the food.
People of the country who have arrived from overseas have been asked to isolate themselves.
People is of fear that due to lockdown there will be less availability of food in future and thus
they are buying as much as possible and hoarding supplies for future use. Supermarkets are
putting limits on purchase of products to control the effect of panic buying (Farzan 2020). Many
are of opinion that government should introduce rationing of foods whereas experts are saying
that it is a difficult process and agriculture sector of Australia is efficient productive enough to
meet the demand.
Reflection
Panic buying that is occurring due to outbreak of coronavirus is nothing but creating
sense of insecurity among the people. They are thinking that due to lockdown, the supply chain
would be hampered and there will be less availability of food in the market. In addition to that,
most people are not willing to go outside the house to avoid the chance of getting infected by
coronavirus and thus, they are buying as much food as possible such they stay in home for longer
period. Hence, this panic buying has led to the hoarding of food supplies in Australia. The
effective tool to control this panic buying is to put limit on purchase of products. However, it is
not possible for stores or supermarkets to monitor each and every one’s amount of purchase
(Telford and Bhattarai 2020). Hence, there is requirement of government intervention such that
they introduce rationing policy and thereby limit over purchase of foods and other supplies.
Considering the present condition of the country there is no immediate need for rationing policy

6ARTICLE ANALYSIS
but if the spread of the disease increases then the government might need to implement the said
policy.
4. The Australian dollar hits lowest level since 2002, ASX extends fall.
Author: Sue Lannin
ABC News, 19th March, 2020
https://www.abc.net.au/news/2020-03-19/jobless-rate-falls-australian-sharemarket-recovery-
coronavirus/12070076
Summary
The article speaks about various issues that Australia is facing. The currency of Australia
that is AUD has fallen drastically. The exchange rate has hit the 55.08 US cents per AUD. This
has occurred just before Reserve Bank of Australia (RBA) has lowered the amount of cash rate
to its record low rate that is 0.25. ASX is also suffering significant fall. The stock market has lost
3.4%. The amount of all major banks has fallen and that is the price of share fell too. Despite the
economic downturns in Australia the employment sector causing a relief for the government and
the policy makers. There was a rise in jobs by 27, 000 units. However, it has been revealed that e
survey for the concerned purpose was done before spread of coronavirus in the country. It has
been found that unemployment rate fell to 5.1% from 5.3%.
Reflection
From the news article, it can be observed that the economy of Australia is largely affected
by the spread of coronavirus in the other countries. Price of currency and stock market depends
on the economic condition of other countries since Australia is an open economy and is involved

7ARTICLE ANALYSIS
in external business with other countries and that is why the country has to face consequences of
economic downturn occurring in other countries (Lepone and Tian 2020). The fall in price of
AUD will lead to fall in price of export goods of the country but there will be no significant rise
in export demand due to the outbreak of coronavirus. In addition to that, many countries have
already announced lockdown. Therefore, there is no chance rise in AUD since there will be no
significant amount of trading. Due to fall in stock market, no new investors from foreign country
would be interested in investing in Australia and thus the country will face low economic growth
associated with low value of domestic currency (Zhao 2020). The employment in the country has
increased but the survey was done before spread of coronavirus to the extent it is now. Hence,
with continuation of lockdown the employment might fall.
5. 5 Charts that explain the Saudi Arabia-Russia oil price war so far
Author: Abigail Ng
CNBC, 1st April, 2020
https://www.cnbc.com/2020/04/01/5-charts-that-explain-the-saudi-arabia-russia-oil-price-war-
so-far.html
Summary
The topic of oil price war between Saudi Arabia and Russia has been a hot talk for some
time now. The article tries to summarize entire case of oil price war. Initially there was pact that
between the OPEC+ countries to boost their production in the first halve of the 2020. However,
sudden outbreak of coronavirus in China caused many business to go temporary shutdown, that
is why the need for fuel to produce energy fell significantly, and hence it did not buy the amount
it used to take from Saudi Arabia. Due to this, the Saudi Arabia faced excess production and to

8ARTICLE ANALYSIS
avoid price fall it asked Russia to lower the production. In contrary, Russia declined and thus
price war between the two started. Owing to this, the shale oil market of the US is suffering and
making losses (Kilian 2016) It is no estimated that if the price war continues then the price of oil
might fall to $10 per barrel.
Reflection
The oil price war is cause of disagreement of Russia to lower its production and due to
which Saudi Arabia retaliated, which further led to fall in price of oil. From the theory of
demand and supply, it is known that when there is excess supply of a good then the price of the
good falls. In this case, the fall in demand for oil due to economic adversity caused in China due
to outbreak of Coronavirus created a sudden rise in supply of oil. Hence, to keep the price at the
same position it is required to lower the production of oil such that supply decreases and demand
and supply equilibrium occurs at the current price. However, as Russia did not lowered its
production Saudi Arabia kept on increasing it production too. Consequently, supply of oil
increased in the market and the caused to price to fall (Mahdi 2019). The fall in price has
impacted its substitute product shale oil which is a new fuel produced in the US. Hence, the oil
price war does not only impacted market of Saudi Arabia, Russia but also adversely affected the
market of shale oil of the US, and this happened due to substitution effect.

9ARTICLE ANALYSIS
Reference
Ayittey, F.K., Ayittey, M.K., Chiwero, N.B., Kamasah, J.S. and Dzuvor, C., 2020. Economic
impacts of Wuhan 2019‐nCoV on China and the world. Journal of Medical Virology.
Binder, C., 2020. Coronavirus Fears and Macroeconomic Expectations. Available at SSRN
3550858.
Farzan, A.N., 2020. ‘It’s Been Nuts’: Costco’s Sales Spike Amid Coronavirus Panic-buying of
Bottled Water, Hand Sanitizer and Toilet Paper. The Washington Post.
Kickbusch, I. and Leung, G., 2020. Response to the emerging novel coronavirus outbreak.
Kilian, L., 2016. The impact of the shale oil revolution on US oil and gasoline prices. Review of
Environmental Economics and Policy, 10(2), pp.185-205.
Leiva‐Leon, D., Pérez-Quirós, G. and Rots, E., 2020. Real-Time Weakness of the Global
Economy: A First Assessment of the Coronavirus Crisis.
Lepone, G. and Tian, G., 2020. Usage of conditional orders and the disposition effect in the stock
market. Pacific-Basin Finance Journal, p.101302.
Mahdi, A.S., 2019. Saudi neomercantilism in the oil price war. Review of Economics and
Political Science.
Telford, T. and Bhattarai, A., 2020. Long lines, low supplies: Coronavirus chaos sends shoppers
into panic-buying mode.

10ARTICLE ANALYSIS
Zhao, L., 2020, March. Risks Faced by Bank of Australia and How to Deal with It. In 5th
International Conference on Financial Innovation and Economic Development (ICFIED
2020) (pp. 339-342). Atlantis Press.