The worldwide pandemic COVID-19 which has been lasting for the last 3 months, has resulted in huge economic damage. It has become the worst time for the global economy. It’s a human tragedy, affecting all the nations. The outbreak of this pandemic has created a massive impact on the world’s economy as well as the stock markets. The slowdown in the global economy caused by the coronavirus outbreak is likely to cost at least $1 trillion. — Impacts Of COVID-19 On The Global Economy
So, what could be the impacts of COVID-19 on the global economy? At first, let’s look at our history. We can see, we have been facing different types of epidemics time and again. But this pandemic is even more severe than those felt during the outbreak of SARS, Spanish flu, influenza, or any other. The 2008 financial crisis led the stock market to drop by more than 56% in around 517 days, while the market dropped by almost 20% in just 21 days during this outbreak. So, we can’t even imagine how much worse the situation is going to be, it’s a worldwide emergency.
Present Impacts Of COVID-19 On The Global Economy
The spread of this virus has pushed the pause button to one of the world’s biggest powerhouses. Countries like the US, China is the world’s largest manufactures and exporters. Issues are felt across the globe, whenever there are issues in these country’s economies. After the spread of this virus in Wuhan, China; to control the spread of the virus, the Chinese government temporarily closed all its manufacturing sectors. China, being the global supply chain of the world, due to the supply chain slowdown, many large companies experienced a decrease in their sales and revenue. After WHO declared this situation a pandemic and countries imposed lockdown, by then businesses are dealing with loss in revenue and disrupted supply chains as factories are shut down. Today, quarantine measures are being applied all across the globe and restrictions are made on movements as well as on business activity impacting the global economy.
How will COVID-19 affect a country’s economy?
The outbreak of this pandemic has affected every country’s economy. The economy of any country depends on three main terms: Export, Foreign Investment and human resource. It’s a time when there are comparatively fewer exports, investments and import of large medical appliances. Business companies and the product manufacturing industries are temporarily shut, people can’t attend their jobs and it’s almost sort of a recession. Only a few shops and pharmaceutical shops are open to provide basic and health care facilities to the people.
This virus is attacking societies at their core, claiming lives and affecting people’s livelihoods. It has not only affected the economy and killed thousands of people but is also playing with people’s mental health. A lot of people are getting into depression and have also caused people to commit suicides due to its fear. On the one hand, it’s affecting the manpower of the country and commerce and trade on the other. It’s time to think about how we are going to survive in this situation when the consumption is too high and production is stagnant? It’s a difficult time for the whole country and its citizens. Coronavirus is now, no longer only a disease, it’s a challenge, a crisis that is killing people without any weapons and bombs.
Will this COVID-19 Pandemic cause Business Industries to fall or recession?
Today, the world’s largest economy, the United States, is almost in a recession. The stock markets have triggered the economic alarm. The current downturn is more extreme than the financial crisis of 2008. Even in this stressful time, there are some types of business industries that grow, some shrink, and while some others are in-between. Companies like Amazon have made great use of this opportunity and have opened 100,000 new roles to support people relying on amazon’s service. Business industries based on e-commerce, entertainment, gaming, video conferencing, pharmaceutical business are those which can grow and have a positive impact on the business economy.
While some business industries based on airlines, travel, cruise, economy and share market, tourism, employment, energy companies, transportation start to contract. Today, the air travel industries have got relatively narrow profit margins and are having lots of debt. While companies like Apple, having a manufacturing partner in China, faced production delays made in Chinese factories. Some carmakers like Nissan and Hyundai were struggling and are now temporarily closed. Meanwhile, the in-betweener industries such as banking, education, health care, manufacturing are the ones which can either grow or fall. Therefore, this pandemic may lead to such conditions where business industries may start to fall. For more read Global Economy After COVID-19 Pandemic.
Many countries would fall into recession and will take a few years to return back to the track. Therefore, the more the virus will last, the more the will be the impacts of COVID-19 on the global economy. Both the country and its people are to be severely impacted. Above all the pandemic is a public health emergency. As long as the spread of this virus doesn’t come under control we cannot possibly return back to normal.
What do you think could be other impacts of COVID-19 on the global economy? Reply to us at firstname.lastname@example.org and also do read our other blog on “How To Stay Productive At Home During Quarantine? ”