The coronavirus is spreading very fast globally. Most of the countries are banning flights and economic activities with the countries of the world. Thus, this question seems valid to ask that How COVID-19 would affect the global economy?
Je pense que le grand probleme vient de l'appareil productif chinois,ainsi que les couts des investissements pour lutter contre ce virus reste colossaux.
MICRO EFFECT. There might be buy panic to stock up on foods and over the counter medical supplies. we began to see this panic buy in many countries already. human socialization and relationship, especially dealing with physical contacts, i.e. greeting with hand shape or kissing, will be practice with more caution during this "reaction" stage. within a year or so, this panic and fear will subside.
MACRO EFFECT. Since China plays a significant role in the world economy, the current disruption in the productive output of China will reverberate throughout the world. If countries respond in times and create appropriate measures to lessen the effect, global recession may be avoided. If there is no proactive plan, many economies will be adversely effected. Major economies, such as the U.S. which significantly depends on Chinese imports, will be affected. in order to blunt the effect, major economies could bring production back home and face higher cost or shift production to outside China---that would required large sum of investment. Ultimately, the world will have to look to China for its capacity to control COVID-19 inside the country and pushes the country to resume its productive capacity status quo ante. This is not the time to blame china. China now needs world support in this fight. China too must allow outside assistance if necessary. Pandemic is a global issue faced by humanity. it is not country specific.
Though many will say otherwise, the global economy was exceeding fragile anyway. There have been economic cycles every 4-7 years over the last 300 years. This current bullish period, in many ways, lasted too long. Interest rates were held too low for too long and both sovereigns and industry leveraged up significantly more than prior periods before a crash. This has led to huge asset bubbles, like housing and equities, fueled by cheap debt. Now there is just a higher peak to fall from. This go-round we see impact on both the demand and supply side, and with monetary policy virtually useless, fiscal policy is kicking in, but that is quite silly as the increasing malaise will not promote folks to go out and spend. Folks are hunkering down. Credit risk has risen particularly in key segments, like US oil and retail, and we will start seeing defaults which will impact the banks and the fixed income markets. The banks, particularly in the US, are leveraged more than other global banks, and I believe are more susceptible to grave challenges. Topping everything, is that the move toward globalization is showing the sharp side of the sword, and so much outsourcing has left countries with the inability to complete fill their own supply chains with a dearth or absence of required products, services, skills or capacity. So you ask how the COVID19 will effect things? It was the match to ignite a global bonfire. Hang on. This will be quite the ride. All that said...... so how is your day????
Of course, this global epidemic can lead to a global crisis due to the slow growth in oil demand and the delay in production, especially in China, South Korea and Italy, and what is encouraged by this more sharp decline in global crude oil prices that may cause the bankruptcy of many American rock oil companies, especially as the latter has significant financial obligations that are due for payment and its production stops, exposing it to the problems of financial insolvency and the resulting layoffs and high unemployment rates. All of this accelerates the entry of the world economy into a deep recession that is difficult and prolonged.
A rethinking and reegineering of global supply chains will happen.
Steven Cinelli Mickel Lu Maithem R. Hadi Stephen I. Ternyik Rashid Ali Khuhro
The are many ways to skin a cat, but of you look ate the different components of GDP, you get a clearer picture:-
Net, I think COVID-19 will impact the global economy.
An example is the decrease in the price of oil and it has affected trade among countries
Dear researchers have a nice Sunday. My question regard the nature of Lombardia (N. Italy) Coronavirus: its death rate is not compatible with COVID19 but with SARS. WHY??? >> see data >> https://www.researchgate.net/post/The_novel_Coronavirus_in_N_Italy_Lombardia_COVID19_2019nCoV_SARSCoV2_shows_a_fatality_rate_compatible_with_SARS_Why
Epidemics in general and their various names cripple the economic movement of countries as a precautionary measure to prevent its transmission between people so that it does not cost the loss of the human element. Therefore, the economic movement, movement and trade that are tributaries of this activity and development to countries are formed, so how is the economic activity and the human element as one of the most prominent in the case of fear of losing it Because of these epidemics.
The impact of the development of the Covid-19 Coronavirus pandemic on the global economy will be very large. The global economy is threatened by recession in 2020. Crisis interventionist economic policy programs are needed to run. I described these issues on my RG profile. Few economic entities such as pharmaceutical companies that will create a vaccine for Coronavirus Covid-19 or enterprises producing disinfectants, protective masks, sterile gloves, etc. However, there will be many more industries, sectors, branches of the economy as well as companies and enterprises that will see declines in revenues from sale of manufactured products and services offered. In macroeconomic terms, countries that are exporters of certain raw materials with currently low price levels on commodity exchanges will suffer more economic and financial losses. In meso-economic terms, tourism, transport, hospitality, gastronomy, show business, cultural events and related services will suffer heavy losses and sectors. In microeconomic terms, falling other sales will also be noted by many other enterprises from other industries and sectors that are cooperatives of other enterprises operating in industries characterized by falling profitability.
The SARS-Cov-2 Coronavirus pandemic is still developing in many countries. In many countries there has been a recommendation or legal obligation: If you can, stay at home. In some countries, the SARS-Cov-2 Coronavirus pandemic is only in the early stages of an epidemic. Coronavirus pandemic is already a global problem. anyone who can should stay at home to reduce the risk of a pandemic spreading. Everyone who can only switch to remote communication, i.e. via the Internet and telephone. It is also necessary to promote only reliable information, i.e. fully confirmed by scientific research in the field of virology.
Apparently, the Coronavirus has already begun to mutate, new strains of the Coronavirus are forming, which can seriously hinder the rapid development of a vaccine or other therapeutic therapy, and the problem of negative impact on the economy may last for a longer period. Do any of you have reliable data sources confirming this type of information that is already appearing in various official media?
In view of the above, scientific research shows that isolation is currently the best preventive solution because Coronavirus is characterized by high levels of infection and there is no vaccine or any other fully effective medicine for Coronavirus yet. In addition, it is estimated that many people who do not have disease symptoms, do not get sick, but they may already be infected with Coronavirus, so that the pandemic does not expand, all people should follow the recommendations, i.e. you should wash your hands often, stay at home and limit the exit from home to the necessary minimum. people who show any symptoms of a cold, such as a runny nose or cough, should not leave the house because they may be infected with Coronavirus, even though they are not seriously ill. The idea is to minimize the extent of the spread of the Coronavirus pandemic and currently isolation, home quarantine is the best solution for all people, regardless of whether they are sick or not.
The importance of internet marketing has been growing in recent years, including the use of social media portals in promotion and marketing. This importance is particularly increasing in the context of the current Coronavirus pandemic. Currently, the use of new online media has particularly positive aspects if young people use smartphones to obtain the necessary, important and reliable information and use social media portals at work and in education processes when many workplaces, schools and universities have suspended their activities. Currently, the importance of using new online media for communication and education in the development of the Coronavirus pandemic is growing significantly. Because of the development of the Koronavirus pandemic in many countries, schools (currently close to March 2020) are closing for 2-3 weeks, young people with teachers and should contact each other only remotely via the Internet.
In my country, kindergartens, schools and colleges are now closed for 2 weeks. I noticed that in some other countries schools and colleges were also closed to limit the development of the epidemic. I believe that this is the right solution because of the high risk of potential spread of the epidemic. Children usually do not have a coronavirus, but they can easily transfer the coronavirus and infect other people, so closing schools and colleges is a preventive and legitimate measure. When schools and universities are closed, e-learning education should be continued. The use of ICTs in education is currently growing. In my country, the closure of schools and colleges is not treated as an additional vacation. The government recommends that children and young people stay at home and study at home.
Questions arise about the risk relationship of the level of contagiousness and the mortality rate of Coronavirus compared to other diseases and diseases that cause high mortality. Other diseases, including those caused by taking paper-like stimulants, alcohol etc., diabetes, atherosclerosis etc. are already well known. It is obvious how to treat these diseases etc. Coronavirus is still a big mystery. The scale of possible development of a pandemic is unknown. Coronavirus has a high level of infection, and there is no vaccine or any other fully effective Coronavirus drug yet. In addition, it is estimated that many people who do not have symptoms do not get sick, but they may already be infected with Coronavirus. In addition, it has now turned out (mid-March 2020) that Coronavirus is rapidly mutating, new varieties are emerging, so controlling a pandemic will be very difficult. The problem of a pandemic may still develop in many countries for a minimum of several weeks or months. It is currently the biggest medical, health, economic problem etc.
At present, however, it is difficult to predict what the world will look like once humanity has solved the Coronavirus problem. A lot will change for sure, the economy will look different. To survive this difficult period of economic downturn, many enterprises will be forced to carry out organizational, technological, financial and other restructuring processes. We can already see many changes. The economy, people's behavior, food preferences, lifestyle, forms of work are changing, etc. The importance of remote work and learning via the Internet is increasing. Consumer preferences and purchasing profiles of citizens will change. We can already see that many people, fearing for their health, change their eating habits and choose healthy, ecological food. Smokers are considering quitting smoking to increase their body's resistance to various virus attacks. A lot will change, but we do not know how much, because there is no answer to many questions about the potential for the continuation of the epidemic, now the Coronavirus pandemic. We don't know when the vaccine will be invented? Maybe only in a few months or later. These are the estimates of pharmaceutical companies. We do not know whether the Coronavirus virus will mutate and create its new, equally dangerous varieties. There are many question marks. What is certain is that after the Coronavirus era, the world will look different. The economy and life of many people will certainly change a lot, but we do not know how much and how the world will look like after the Coronavirus era.
There are still many questions to be answered in the coming days or at a later date based on scientific research. For example, it is already known that Coronavirus on objects (with smooth surfaces, e.g. shopping carts) can last for an average of up to 3-4 days. It is therefore very important to take special care in contacts in other environments, you should often wash your hands with the use of detergents and soaps that cause the coronavirus to break down. It is also known that Coronavirus is unfortunately resistant to slight temperature changes. According to the World Health Organization, the arrival of spring and summer (in 2020 in the northern hemisphere of the planet Earth), raising the air temperature by up to a dozen degrees C will not cause the coronavirus to break down. We already know a lot, but we don't know more. It is necessary to continue scientific research in the field of Coronavirus infectivity and possible methods of controlling Coronavirus, etc.
On the other hand, it is certain that the Coronavirus pandemic will greatly affect the global economy. Due to the development of the Koronavirus pandemic, the recession of the global economy is possible in 2020 in many countries now (mid-March 2020) additional anti-crisis, pro-development, activating entrepreneurship, consumption, bank lending measures of fiscal, budgetary and monetary policy instruments are launched . Today, many economists and financial analysts say that there will definitely be a recession in many countries where tourism is one of the main branches of the economy. Certainly Coronavirus's impact on the economy, financial markets and the energy sector will be very large. Because the prices of stocks, gold, energy resources and other assets on capital markets are falling rapidly, the scale of economic slowdown in many countries will certainly be large. We currently have a stock market crash on the stock market similar to other stock market crashes that have previously started global financial and / or economic crises. In view of the above, the recession of the global economy in 2020 is very likely. After the global recession, economic growth will be very likely to fall in the next few years. Due to the increasing scale of human infection with SARS-Cov-2 Coronavirus causing COVID-19 disease, the risk of subsequent infections is increasing rapidly and the scale of the epidemic is difficult to estimate. At the moment, until the Coronavirus vaccine and epidemic scale are created, and now the pandemic will increase, the Coronavirus has become the potential major source of the global economic crisis. In countries where the development of the epidemic will have greater negative economic effects, production will fall sharply, offering services such as tourism, catering, hotel services, etc., income, investments, unemployment will increase, tax revenues to the state budget will decrease, and economic growth will decline in 2020 a year can even reach several points percent. In this type of economies, economic recession is very likely, i.e. a decline in economic growth to a negative level, below zero of GDP. The current stock market crash consisting in a strong overestimation of valuations of shares, other securities, gold, oil and other commodities confirms the highly probable negative scenario about the possibility of recession and serious problems in financial systems in a significant part of countries in 2020.
In view of the above, I believe that the recession of the global economy is possible in 2020 due to the development of the Koronavirus pandemic. Therefore, it is necessary to launch additional anti-crisis, pro-development, activating entrepreneurship, consumption, credit actions of banks, instruments of fiscal, budgetary and monetary policy. Some central banks have already announced lowering interest rates. Governments of many countries are increasing spending on the delivery of public goods, on increasing epidemiological safety. Financial funds are being increased, from which grants or low-interest loans are granted to enterprises operating in economic sectors particularly burdened with the negative effects of the development of the Koronavirus pandemic.
In the context of the high risk of a global economy recession in 2020, the following question now arises: Is a significant reduction in interest rates a good anti-crisis instrument, thanks to which the world can avoid the global economy recession in 2020? Unfortunately, more and more economic data indicate that the current (mid-March 2020) development of the Coronavirus pandemic may lead to a global recession in 2020. There will certainly be a recession in many countries where tourism is one of the main branches of the economy. Certainly Coronavirus's impact on the economy, financial markets and the energy sector will be very large. The prices of stocks, gold, energy resources and other assets on capital markets are rapidly falling. We currently have a stock market crash on the stock market similar to other stock market crashes that have previously started global financial and / or economic crises. In view of the above, the recession of the global economy in 2020 is very likely. Accordingly, central banks are increasing their activity to maintain liquidity in the banking sectors. However, only some central banks have decided to lower interest rates. Should the other banks take similar actions? should central banks significantly lower interest rates as interventionist anti-crisis measures? can a significant reduction in interest rates, lowering interest rates to levels close to zero or below zero, to levels of negative interest rates be a good anti-crisis instrument? Will lowering interest rates to negative interest rates increase liquidity and allow lending in banking sectors to be maintained at optimal levels? Is a significant reduction in interest rates a good anti-crisis instrument, thanks to which the world can avoid the recession of the global economy in 2020?
In my opinion, anti-crisis measures implemented since autumn 2008 in many countries as part of interventionist, Keynsian, anti-crisis socio-economic and monetary policy have proved to be largely effective. After several years of their use, the economies of many countries returned to balance and economic growth. In 2020, the global economy, due to the development of the Koronavirus pandemic, is threatened by recession, a strong decline in economic growth, an increase in unemployment, a decrease in production, investment, a decrease in tax revenues to the public finance system, etc. Therefore, in 2020 similar actions should also be taken under interventionist, Keynsian, anti-crisis socio-economic policy and monetary policy, similar to those anti-crisis and development-oriented activities that have been carried out since autumn 2008 for a period of several years. Activities that under interventionist, Keynsian, anti-crisis socio-economic policy and monetary policy, similar to those anti-crisis and development-oriented measures that have been implemented since autumn 2008, should now be taken and developed in my publications available on the Research Gate website.
In my country, as in many other countries, the government is currently working on developing an anti-crisis strategy, a Keynesian socio-economic policy in the era of the Koronavirus pandemic, i.e. the definition of instruments for fiscal and budgetary pro-development policy, whose task will be to stimulate entrepreneurship in the event of a drastic decline in economic growth caused by development Coronavirus pandemic. At the same time, central banking, theoretically independent of the government (but only theoretically) is considering lowering interest rates and launching a program to buy Treasury bonds on the secondary market to increase liquidity in the public finance sector. In addition, the central bank may also launch loans for commercial banks on preferential terms and / or purchase of lost claims, e.g. unpaid loans and junk securities. Commercial banks, which in my country are currently mostly under state control (the Treasury controls a significant part of the banking sector), launch a program of deferring repayment of bank loans (mainly mortgage and business) offered to borrowers (mainly mortgage and business) at no additional cost. However, because in the era of the design and implementation of anti-crisis socio-economic policy in the era of the Koronavirus pandemic, politics rather than pragmatism dominates to a large extent, the issue of the effectiveness of implementing anti-crisis socio-economic policy is questionable. Comments from various political circles suggesting completely contradictory concepts for anti-crisis socio-economic policy appear in the media. Some media consider issues such as whether the central bank should or should not start buying debts at risk from high credit risk from the public and / or commercial financial sector. Opinions that are completely contradictory are published in the media without conducting a public, substantive debate. Experts in the field of anti-crisis, Keynesian socio-economic policy offer ready solutions for the emerging crisis situation. However, for some political environments, constant dispute and constant criticism is more important than taking up teamwork during this particular period of development of the Koronavirus pandemic and jointly working out the best anti-crisis situation, Keynesian socio-economic policy. The current period is special.
The developing economic crisis is significantly different from the global financial crisis of 2008. the forecasted slowdown in economic growth in 2020 will be generated mainly by a decrease in liquidity in public financial sectors and not a decrease in liquidity in commercial financial sectors, i.e. the situation known from autumn 2008. The basic question now is: How, with what projects should additional money be introduced into the economy so that this extra money creates new jobs and investments in the real economy? Countries with their own currency are now considering a significant increase in the scale of additional money supply to the economy. Further questions: Which ventures in the public sector and in the commercial sector should be directed towards additional money so that real, new business ventures, new jobs etc. are created instead of merely or mainly supporting current consumption and counteracting the drop in valuation of securities on stock exchanges? Of course, such issues as supporting current consumption and counteracting declines in valuation of securities on stock exchanges is also important, but in the longer term, for several months, only these activities do not always mean sustainable economic growth in the real economy. No one can accurately estimate how strong the decline in economic growth will be, how deep the recession of the global economy will be due to the development of the Coronavirus pandemic. Therefore, now in this particular period, instead of conducting disputes mainly determined by political motives, all political circles, together with experts, independent economists specializing in the field of anti-crisis, Keynesian socio-economic policy should undertake teamwork to quickly and efficiently develop an adequate current anti-crisis situation, Keynesian socio-economic policy and efficiently apply it to reduce the scale of the forecast economic recession in 2020.
In my country today (17.3.2020) the Monetary Policy Council at the central bank, i.e. at the National Bank of Poland, lowered the basic interest rates by 0.5 points. percent. from 1.5 percent at 1.0 percent It was a change in interest rates after a 5-year period of immutability. On the same day (17.3.2020), the stock indexes on the national stock exchange rose by several percent. after more than 2 weeks of dynamic declines. Another reduction in interest rates is very unlikely considering the profitability of Treasury bonds sold to foreign investors who expect a much higher interest rate on these instruments issued by a small, developing country relative to analogous instruments for the safe placement of financial surpluses, i.e. bonds issued by the State Treasury highly developed, characterized by many times higher productivity, production potential and capital resources in the financial sector. The effect of financial market psychology worked but it is a short-term effect and taken into account mainly by analysts using technical analysis and, to a lesser extent, fundamental analysis. However, the significance of the central bank interest rate reduction on economic effects in the real economy over a longer period is more important. Commercial and consumer loans in commercial banks have a much higher interest rate than the interest rate. central bank. In addition, the gap between interest rates on deposits and deposits as well as loans at commercial banks is large in some countries and therefore the real effect of reducing interest rates. by the central bank can be very limited. Additionally, in some countries commercial banks are not obliged to automatically lower their interest rates. when the central bank does it. In addition, after a reduction in interest rates. by the central bank, commercial banks are lowering, observing each other, as part of interbank competition, mainly at first interest rates deposits and deposits, and only after some time they decide to reduce interest rates on loans and para-credit products, such as leasing, factoring, etc. to a limited extent, etc. An exception to this rule may be the situation when a significant part of the banking sector is controlled in a given country indirectly by the government through the majority shareholding of the Treasury in the shareholding of certain largest commercial banks in a given country. Then these processes can be carried out faster, e.g. through political pressure.
However, if foreign financial institutions notice such a large impact of policy in economic processes, in the operation of the banking system, in the functioning of the financial system, they may assess this issue as high, additional systemic and political risk. Then foreign financial institutions, including internationally operating banks and investment funds may resign from continuing investment activities in this type of country. In a situation where a foreign financial institution provided a significant inflow of financial capital to domestic securities markets and was responsible for a significant part of the capitalization of the entire stock exchange market, the short-term, psychological positive effects of the central bank's interest rate cuts in the longer term may, unfortunately, no longer operate in the real economy. [...] Entrepreneurs know this and therefore lower interest rates. by 0.5 points percent. in this type of situation, it will have little effect in the real economy as a pro-development, anti-crisis interventionist instrument of monetary policy (and in a broader sense also of economic policy in the event of incomplete independence of the central bank from the government). On the other hand, if the central bank, as part of interventionist monetary policy, undertakes the purchase of treasury securities in order to improve liquidity also in the public financial system, then it can work "psychologically" and has a really significant pro-development impulse, if additional money is really important for entrepreneurs for investment development. however, in the situation of a threat of a strong decline in economic growth and recession, such instruments of mild monetary policy may be justified, as most enterprises no longer consider the development of the company and the implementation of subsequent investment projects, only make decisions regarding maintaining liquidity and avoiding financial bankruptcy. In such a situation, widening and deepening the scale of mild monetary policy may be justified if it does not lead to a strong rise in inflation and, as a consequence, the risk of increased inflation, which could be an introduction to a new type of economic crisis. This risk may be large in the absence of real independence of the central bank.
In my country, for the first time, the central bank plans to buy Treasury bonds on a large scale so that their interest rate does not increase significantly, i.e. as an instrument of maintaining liquidity in the public financial system in a situation where there is a shortage of foreign investors to roll previously issued bonds series. In this way, Poland will avoid the risk of a crisis in public finances according to a model known from the countries of southern Europe, in which this type of crisis has occurred since autumn 2008, when the global financial crisis appeared. This potential interventionist monetary policy instrument, consisting in the purchase of Treasury bonds from the secondary market by the central bank in Poland, was introduced as an additional instrument of financial system security after the appearance of the global financial crisis in 2008. This interventionist instrument at the central bank's disposal has been functioning for several years in several other countries, including the largest economies of the Anglo-Saxon financial system, and was used extensively in those countries after the global financial crisis in autumn 2008. In Poland, however, so far the National Bank of Poland has not used this option as part of coordinated activities with budget policy managed by the government through central institutions of the state's public finance system.
However, at present the situation is special, an extremely high risk of losing financial liquidity in the state's public finance system, because a significant part of globally operating foreign investors, including investment banks and investment funds, avoid securities issued in countries that are small economies, developing economies characterized by elevated credit and investment risk. It is now possible to apply this interventionist instrument on a large scale, because the decision-making bodies of the European Union in this particular situation have abolished the obligation for EU member states to apply the golden rule of state finances, i.e. maintaining a budget deficit of up to 3%. GDP. In connection with this special situation, the possibility of a liquidity crisis in the state finance system, the issue of central bank independence is losing significance, giving way to the issue of increased coordinated interventionist, anti-crisis activities of the government's socio-economic policy and a softened one, providing liquidity to the state's financial system and commercial banks for monetary policy of the bank central.
What do you think about this topic?
Please reply.
I invite you to discussion and scientific cooperation.
Thank you very much.
Best wishes.
Dariusz Prokopowicz
To janet. Covid19 was merely a trigger to an overall inflated economy largely propped up with cheap debt. Research overall debt levels in the US and abroad, compare with overall economic activity and the growong inequality of resources within the various societies. I have speculated for about a year that conditions were becoming ripe for a global retraction if not a meltdown. The virus was the pin that burst the asset bubble. Lastly the ramifications will be incredibly significant in that monetary policy is no longer a tool with rates so low. And the stimuli added by the sovereigns is further borrowed money on already overly leveraged balance sheets. I
@janet. Small biz should be a priority. My larger response is for all countries, particularly th US to to an economic reset. Think not about the existing industries that you think you should save. That is in the current day. Rather if you are prepared to spend trillions, allocate it to industires that are crucial for the next twenty years. Clean energy, education, 4IR, and many more. We globally have this moment in time to recalibrate, reposition and reprioritze. But we need leadership currently not exhibited.
Nice question, if people were asked to stay in home industries never operate so the production will be stopped, in simple words "no production no trade" ultimately it affects the country's economy
Inevitably, especially the most vulnerable population, such as informal workers and small businesses. Therefore, it is necessary to apply quarantine early, to limit the spread time and reactivate the economy early.
Yes !
https://www.medrxiv.org/content/10.1101/2020.03.22.20040758v1
The Covid-19 pandemic has scarred the world. It is life now completely unrecognisable in comparison to the freedoms we had a few short months ago. Whether Covid-19 triggers an economic crisis depends on the ability of industries to adapt to the new normal.
Lockdowns have restricted travel so those industries which have successfully digitalised are thriving. Whilst those businesses that are unable to do so are in danger of collapsing and bringing a significant chunk of the economy down with them.
In this global technocracy, almost everyone has access to a personal digital device. The limiting factor to successful digitalisation is therefore the industry rather than the public. So, the industries that will survive the Covid-19 crisis are those who either do not need to digitalise or can digitalise completely. For example, even the education system has fully digitalised. From kindergartens to universities; every educational institution is holding online classes. Some are even pre-recorded. Homework is submitted at the click of a button. This new system has resulted in cost savings and one wonders why this was not more common before.
The hospitality business has suffered as it can only partially digitalise. Sit-in restaurants are empty but online take-away services are booming. The role of tele-medicine in the healthcare sector is increasing for outpatient services. Some patients even prefer to have a consultation via telephone or video calls whilst sitting in their own homes. However, many people are unwell and need to be admitted to hospital. So, this sector can’t fully digitise.
Any sector in the economy that can digitalise will thrive under these conditions of the Covid-19 pandemic. Indeed, once the lock downs end these industries may remain fully online having realised the significant benefits of digitalisation.
However, it is difficult to digitalise international travel. Furthermore, now that the world is more digitalised than ever before, we do not need to travel as much as we did before. So, it will be interesting to see what remains of the airline industry when the lock downs end…
Both the development of the SARS-CoV-2 coronavirus pandemic causing Covid-19 disease will greatly affect the global economy as well as the anti-crisis interventionist instruments used, programs of specific socio-economic policies will also significantly affect the individual national economies in which they are used. What will be the effects of these processes, including the development of the SARS-CoV-2 Coronavirus pandemic and the socio-economic anti-crisis policies used, and which factors will affect the global economy to a greater extent, we will find out in a few weeks and / or months. The possible return of the SARS-CoV-2 Coronavirus in the autumn of 2020 and in the following years will no longer have as much impact on the global economy as the current pandemic.
Greetings,
Dariusz Prokopowicz
I think there is a high possibility of another Great Depression in 2020s which the world had witnessed once in 1920s, exactly a century ago.
check this link: https://www.linkedin.com/pulse/view-point-economic-impact-covid-19-gender-disparity-radika-kumar/
2.0 Economic Analysis of COVID-19
For most countries in particular the small states of Caribbean and the Pacific, Tourism, Hospitality and Civil Aviation (airline) are the largest contributors of gross domestic products (GDP). With various actions undertaken by countries across the globe including closure of borders and lockdowns, travel of people have been restricted as well as the demand for travel services. Coupled with these the reduced demand for commodities has overall affected the exporters in the tourism sector. In other words, mode 2, consumption abroad as defined by the WTO General Agreement on Trade in Services (GATS) is restricted.This has resulted in overall reduction in the total aggregate demand for countries at the macroeconomic level. (Contraction of economies and recession).
Furthermore, those businesses and firms that are small medium enterprises (SMEs) involved in the supply chain are also affected. As demand for goods and services declines globally, these small businesses therefore either produce less or are compelled to shut down and move out of the market. On the other hand, firms that have used technology as an input have gained from this crisis and have a first mover advantage. For some of the SMEs, further stringent measures need to be adhered to, in order to remain in the supply chain process for exports. The exporters need to ensure that goods sourced within the supply chain adhere to stringent safety requirements that meet the safety of people i.e. protection of human health. This measures though necessary are likely to increase the marginal cost of firms in particular the SMEs .As a result of these increased cost and low income, firms have been laying off workers.
At the household and firm level income has declined. As more workers join the unemployment pool, the purchasing power parity of individual consumers have declined. As the same time, savings are also affected as consumers use savings for consumption expenditure. The investment in the financial markets have also declined and with lockdown investor confidence is low. The financial markets as are result is affected.
COVID-19 however has benefitted the online sales sector and businesses that have been heavily involved in e-commerce. However, countries that have been involved in cross-border online sales and exports have been impacted as a result of lockdown and change in transport and trade facilitation requirements of importing members. Customs requirements at the border has become more stringent. Countries that have electronic customs and paperless trade would be less burderned in comparison to those that are still using manual systems and processes. Despite consumers ability to access online goods and services, the delivery of the good is an issue in particular for products that are ordered through online and need to be exported. Countries that have a well maintained e-commerce trading systems and platforms may be able to cater for the domestic market more efficiently then exports. In other words, for the developed economies, SMEs that have the required access to broadband and online facilities, the change in their business models from physical presence to online platforms would enable its survival. This however, is more challenging for SMEs in small states and least developing countries.
Looking at the labour market, the demand for Health workers, retailers and those involved in online sales has increased as a result of the surge in demand for such services. There has been a shift of workers from other sectors into these sectors as the demand arises. In the long run, given the shift in the labour market there could be surplus of labour in these sectors and lower wage rates in these sectors too.
https://www.euronews.com/amp/2020/05/20/coronavirus-how-much-is-the-world-economy-expected-to-shrink
https://www.cnbc.com/amp/2020/04/24/coronavirus-pandemics-impact-on-the-global-economy-in-7-charts.html
https://news.un.org/en/story/2020/05/1064032
COVID-19 has caused one of the biggest threats to global economy. According to International Monetary Fund (IMF), the global economy is expected to shrink by over 3% in 2020. The pandemic has pushed the global economy into a recession and hence the economy has shrunk.
Rashid, the Coronavirus pandemic has already triggered a health and economic crisis. The question that is being asked at the moment by a range of academic and professional experts is how deep the problem is - in other words, what is the scale, severity and length that the scarring will take and what measures are needed to manage, if not mitigate against, further scarring of the national and global economic order. Interesting question...
The outbreak of pandemic Covid-19 all over the world has disturbed the political, social, economic, religious and financial structures of the whole world. World’s topmost economies such as the US, China, UK, Germany, France, Italy, Japan and many others are at the verge of collapse. Besides, Stock Markets around the world have been pounded and oil prices have fallen off a cliff. In just a week 3.3 million Americans applied for unemployment and a week later another 6.6 million people started searching for jobs. Also, many experts on economic and financial matters have warned about the worsening condition of global economic and financial structure. Such as Kristalina Georgieva, Managing Director of International Monitory Fund (IMF), explained that “a recession at least as bad as during the Global Financial Crisis or worse”. Moreover, Covid-19 is harming the global economy because the world has been experiencing the most difficult economic situation since World War-II. When it comes to the human cost of the Coronavirus pandemic it is immeasurable therefore all countries need to work together with cooperation and coordination to protect the human beings as well as limit the economic damages. For instance, the lockdown has restricted various businesses such as travelling to contain the virus consequently this business is coming to an abrupt halt globally.
Global timetable is grossly distorted. Every aspect of social-economic activities is affected. Actually, it may take a long time for the world to fully recover.
The impact of COVID-19 on East African Economies
The Coronavirus (COVID-19) pandemic is currently causing significant adverse impact on the global economy with governments around the world implementing various fiscal measures to mitigate its effects and provide relief for businesses and households. Within Africa, the impacts of COVID-19 are being felt in different ways and the measures taken by the respective governments have also differed on the areas of focus and comprehensiveness.
Africa’s projected GDP growth of 3.2% for 2020 is now expected to fall to -0.8%. This is due to the enforced partial or total lockdown of economies brought on by the pandemic. The outbreak has led to disruption in the various sectors, most notably the financial industry and the tourism and hospitality sectors.
In Kenya, projected GDP growth in 2020 now stands at 1% from 5.7% due to the gravity of the pandemic; with the economy seeing a decline in tourism activity, export revenues, and a disruption in the supply chain. In Ethiopia, the country is expected to grapple with high unemployment, and GDP growth has been revised to 3.2% from 6.2% in 2020. Similarly, the outlooks in Tanzania and Uganda show a similar trend with GDP growth being revised to 2% and 3.5% respectively (decline in 3.3% and 1.8% percentage points). Tanzania is showing waning demand for mineral exports considering global supply chain interruptions. The economy in Uganda is also faced with the disruption of supply chains and weakened global demand for goods.
https://www2.deloitte.com/tz/en/pages/finance/articles/impact-of-covid19-on-ea-economies.html
The June 2020 Global Economic Prospects describes both the immediate and near-term outlook for the impact of the pandemic and the long-term damage it has dealt to prospects for growth. The baseline forecast envisions a 5.2 percent contraction in global GDP in 2020, using market exchange rate weights—the deepest global recession in decades, despite the extraordinary efforts of governments to counter the downturn with fiscal and monetary policy support. Over the longer horizon, the deep recessions triggered by the pandemic are expected to leave lasting scars through lower investment, an erosion of human capital through lost work and schooling, and fragmentation of global trade and supply linkages.
https://www.worldbank.org/en/news/feature/2020/06/08/the-global-economic-outlook-during-the-covid-19-pandemic-a-changed-world
Most countries are expected to slide under recession
https://www.worldbank.org/en/news/feature/2020/06/08/the-global-economic-outlook-during-the-covid-19-pandemic-a-changed-world
Kindly check https://www2.deloitte.com/tz/en/pages/finance/articles/impact-of-covid19-on-ea-economies.html
Dear Rashid Ali Khuhro
The effect of the COVID-19 in terms of loss of human lives is priceless, but its impacts on the global economy and sustainable development scenarios are also disturbing. For instance, the IMF predicts that the world will enter into a recession worst than the Great Depression of 1930, with a preliminary estimation of the economic impact of the crisis at US$ 2 trillion.
One of the suggested solutions is based on the idea of the green recovery that could enhance the implementation of the SDGs to end poverty, protect our planet and ensure prosperity, rather than return to the former social patterns that would let us more vulnerable to future crises.
I would like to invite the participants to access on ResearchGate my latest publication about this topic: Book Post-COVID-19 Rebuilding Our Paradigms Through Sustainable D...
Kind regards,
Ernani Contipelli
The impact of the Sars-Cov-2 (Covid-19) coronavirus pandemic in March 2020 triggered a stock market crash and an economic recession in 2020. On the other hand, the 3rd and 4th waves of the pandemic in 2021 had a much smaller impact on financial markets and the economy. Currently (October 2021), a significant number of countries have already managed to recover their economies from the deep crisis caused by the pandemic in 2020. Some economies are already experiencing high economic growth.
Best regards,
Dariusz Prokopowicz
Hi Dr Rashid Ali Khuhro . It affects the global economy very badly in all aspects.