The extent of the damage to the global economy caused by novel coronavirus COVID-19 moved further into focus as UN economists announced a likely $50 billion drop in worldwide manufacturing exports in February alone.
Is this a road to recession, or we should expect a speedy recovery after the virus is gone?
Yes, world economy is at risk due to outbreak of coronavirus.
http://www.oecd.org/berlin/publikationen/Interim-Economic-Assessment-2-March-2020.pdf
Dear Rajko Sekulovic,
It has recently been discovered that melting glaciers have released many new types of viruses that have been frozen in glaciers for millions of years. In addition, recently the World Health Organization indicates that in recent years many new strains, types of viruses and bacteria for which there are no drugs have been created. This is due to the fact that in the situation of widespread use of certain types of drugs, bacteria become resistant to antibiotics. Is the significance of natural medicine growing in this connection? How to protect yourself against infections of new types of viruses and bacteria? In addition, there are also economic effects. Due to the development of coronavirus infections in China, production was stopped in many factories. A significant drop in economic growth is expected in 2020 in China. As a result, the scale of international economic exchange will fall. The level of economic growth in the global economy may drop significantly.
A lot of economic data and the situation on financial markets indicate that coronavirus may be the main driver of economic growth in the global economy in 2020. A significant decline in economic growth is forecast in many countries in 2020 due to an increase in human coronavirus infection. According to many healthcare centers and institutions, an effective, tested coronavirus vaccine may not appear until mid-2020 or later. Until then, the number of coronavirus infections may increase significantly. In China, many companies have stopped production due to an increase in coronavirus infection. In many countries, tourist traffic is already falling, the number of tourists is rapidly decreasing. Countries in which international tourism constitutes a significant share of Gross Domestic Product are particularly vulnerable to the decline in economic growth. A significant decrease in international trade is also forecast in countries where many cases of human coronavirus infection have been diagnosed. In recent days (beginning of March 2020) there have been major drops in the valuation of securities on stock exchanges, which is also a signal confirming the forecasted next wave of decline in economic growth in 2020. Until recently, in 2019, the so-called trade wars conducted between the largest economies of the world, i.e. between the USA, China and the European Union. However, this factor is apparently already becoming less relevant to the global growing problem associated with the continuing (early March 2020) increase in human coronavirus infection. Therefore, in 2010, coronavirus will be the most important factor slowing down economic growth.
Due to the growing problem of coronavirus in 2020, economic growth will significantly slow down globally and in many countries. Since the end of 2018, the pace of economic growth has slowed down in many countries due to the so-called so-called major economies run by major economies, including Trade wars. Contrary to the concept of free, market, international capital flows and goods, products and services within cross-border trade, barriers imposed by individual countries, e.g. in the form of prohibitive duties, generate a global slowdown in economic growth. In recent months, another significant factor has appeared that increases the scale of the forecasted economic slowdown in 2020. This factor is the growing problem of coronavirus, because of which many factories in China have ceased to operate, income from tourism is falling, from tickets in cinemas and other mass events in countries where the most cases of coronavirus infection have been diagnosed. Therefore, the importance of planning and implementing pro-development, anti-crisis, Keynesian socio-economic policy is growing.
My research suggests that perhaps credit risk management procedures and systems have already been optimally improved, and now commercial banks mainly deal with the improvement of IT systems, cybercrime, data transfer on the Internet, and development of electronic internet and mobile banking. Over 10 years have passed since the appearance of the global financial crisis in September 2008. For several years, the economies of many countries have already returned to post-crisis balance, to optimal levels of economic growth. The situation on the stock exchange markets has also improved significantly after a few years since 2008. Recently, however, more threats and factors are slowing down the economic growth of the global economy. These factors currently include the so-called trade wars waged between the largest economies of the world, including primarily the US, China and the European Union, and the growing problem (currently beginning of March 2020) of the increase in coronavirus infection. For these two reasons alone, a significant decline in economic growth is forecast in many countries and globally in 2020. As a result, the economic and financial situation of many enterprises will deteriorate.
For example, the economic and financial situation of enterprises producing mainly for export and tourism companies may deteriorate significantly. If companies are in the process of paying back loans and their finances are burdened with a high level of debt, then there is a possibility of an increase in financial liquidity risk and an increase in systemic credit risk, i.e. not timely repayment or suspension of repayment of bank loans. Are commercial and investment banks prepared for this possible negative scenario? Did the banks, after negative experiences from the global financial crisis of 2008, improve their standards and procedures for managing credit risk and do not have to fear a significant slowdown in the economic growth of the global economy in 2020?
Since the end of 2018, there have been symptoms of a slowdown in global economic growth. In 2018-2019, the so-called so-called trade wars waged between the largest economies of the world, including in particular the US, China and the European Union. However, at the beginning of 2020, another important determinant appears to be the continuation of the slowdown in the global economy's economic growth, i.e. the development of human coronavirus infection. At the moment (early March), many economic data indicate that the two factors mentioned above will significantly reduce the rate of economic growth in the economies of many countries. Currently, mainly in China, production has stopped in many factories. A significant drop in economic growth is expected in 2020 in China. As a result, the scale of international economic exchange will fall. The level of economic growth in the global economy may drop significantly. Whether the already noted significant scale of the slowdown in the global economic growth may cause serious financial problems in some large enterprises, corporations and / or financial institutions in 2020. Can the currently forecast decline in the economic growth rate of the global economy cause a large decrease in sales revenues and a strong increase in the level of liquidity, debt, investment risk, etc. in many business entities and financial institutions, commercial banks? Is it possible in 2020 to declare bankruptcy of a large corporation or a large bank, which could trigger the emergence of another financial and / or economic crisis? Is this highly likely or rather unlikely? Have credit procedures and credit risk management processes been improved in banks after 2008 and the risk of another financial crisis occurring is low or rather high?
In the last week of February 2020, stock exchanges experienced the largest, most strong and dynamic drops in share prices since the stock market crash of mid-September 2008, i.e. the stock market crash from which the global financial crisis began. The stock market crash of mid-September 2008 was triggered by the bankruptcy of the fourth largest investment bank in the world, a bank with over 100 years of Lehman Brothers history. Are the strong declines in stock prices from the end of February 2020 a symptom of the onset of a major, medium or long-term stock market downturn and a significant deepening of the decline in global economic growth in 2020?
Currently, there is basically full agreement of researchers and scientists on the need to increase entrepreneurship activation and innovation in many countries, both developing and highly developed. Systemic, state-run activation of entrepreneurship and innovation is one of the objectives of interventionist, anti-crisis, national socio-economic policies. However, many studies show that the mere increase in financial resources from the state budget does not ensure high efficiency of the process of distribution of these subsidies and loans and does not ensure high efficiency of the entire policy of activating innovation and entrepreneurship. Therefore, how should the institutions and processes of distribution of grants and loans be improved, which aim is to finance the development of new micro-enterprises, new innovative start-ups and more innovative development or research projects implemented also by other types of business entities?
Activation of entrepreneurship is one of the objectives of interventionist, anti-crisis, national socio-economic policies in the situation of deepening recession in national economies. Currently undergoing trade wars, including additional barriers imposed to reduce international trade are causing a decline in economic growth in many countries. In addition, the development of human infection with coronavirus will also contribute to a significant decline in global economic growth in 2020. Therefore, the importance of pro-development, interventionist economic or socio-economic policy of the state is growing.
As part of a more pro-development, interventionist economic or socio-economic policy, the state should act as an investor financing from the state budget funds investments in the development of public goods infrastructure in strategic business sectors, i.e. investments in the development of communication, road and bridge infrastructure, energy and security , construction, etc. In this way, new jobs are created, citizens' incomes increase, consumption increases and the effect is an increase in production and improvement of economic growth. In this way, thanks to a more pro-development, interventionist economic or socio-economic policy, the state helps the economy recover quickly from the phase of economic slowdown and / or from the phase of the economic crisis.
In recent years, the importance of planning, shaping and implementing pro-development socio-economic anti-crisis policy, which will provide an antidote to the forecasted slowdown in economic growth, has been increasing. Public policy, including social policy should ultimately aim to meet the needs of citizens. In countries where a prosocial democratic system works efficiently and thus the participation of citizens in shaping public policy enables the design and implementation of such public policy as citizens and voters expect. However, not always planned as a pro-social public policy is properly conducted by the government. This can happen in the situation of a significant global recession, i.e. a strong slowdown in the global economy's economic growth, which has a significant negative impact on economic processes in a given country. However, the extent to which economic growth will slow down in a given country depends on many domestic factors, such as the level of public debt of state finances and the deficit in the central budget of the state.
In addition, the level of domestic productivity, investment, unemployment, citizens' incomes, consumption, inflation, interest rates, etc., which directly and indirectly determine the financial, material, housing etc. of the citizens is also important. The state, having the instruments of pro-development economic policy, tries to activate economic processes, activate entrepreneurship, innovation, investments, etc. so that the economy develops effectively and citizens receive high remuneration, to improve the material and financial situation of citizens, etc. citizens expect this and in a country with a democratic system they choose a government that implements just such a plan to shape pro-development socio-economic policy to build a state of economic and social well-being. In a state of economic and social well-being, citizens should feel happy. In the publications available on the Research Gate portal I described the instruments of pro-development socio-economic policy on the example of the Family 500 Plus Program and the Flat Plus Program (Mieszkanie Plus Program). I invite you to cooperate in the study of this issue.
In my scientific work, I also examine the issues of specific concepts of pro-development housing policy as an important element of anti-crisis socio-economic policy. I am investigating the impact of the Flat Plus Program conducted in Poland for 4 years as an important instrument of pro-development housing policy on the activation of economic growth, including the creation of new jobs, improvement of citizens' housing, improvement of the housing situation and as an instrument whose long-term goal is to be to counteract the processes of demographic change society defined as aging of the society. Research shows that in many situations, economic problems cause social problems and vice versa. Accordingly, social and economic problems are interdependent. Key social problems in many countries include the poverty of a significant proportion of the population, i.e. low income for some citizens. Poor income, material, financial, housing, etc. situation of citizens is associated with poverty. In addition, high levels of poverty are often associated with low levels of education, high levels of unemployment, low consumption, lack of financial savings, limited access to many basic services offered by both commercial enterprises and those offered by public sector institutions.
Therefore, the high poverty scale of a significant part of society is a factor limiting the country's economic development. In such a situation, within the framework of social and socio-economic policy, the State should support citizens in order to reduce the scale of poverty in society. I described this type of socio-economic policy in my publications on the example of the Family 500 Plus Program and the Flat Plus Program (Flat Plus Program) used for 3 years. I invite you to cooperate in research on this subject. In addition, other social problems also include negative processes for the economy of changes in the demographic structure of society, i.e. aging of the society. Social problems also include an increase in school violence and youth crime, an increase in the use of certain categories of drugs, etc. The state incurs high costs in programs to combat the negative effects of these social problems, e.g. in cases of accidents caused by people under the influence of drugs, intoxicants . It is necessary to conduct prevention and prevention programs consisting in raising public awareness through social campaigns conducted in various media, including new online media and social media portals. This is necessary because all these social problems generate high costs for the state and contribute to the slowdown of economic development.
In view of the above, it is important to define the main strategic challenges that are implemented as part of long-term economic policy. Strategic goals to be achieved should be defined in each developing country, i.e. goals that will be implemented over a period of several or more years. Strategic goals include mainly development projects whose task is e.g. to improve communication and technological infrastructure, and to develop systems that provide citizens with security in various categories, including, e.g. diversification of energy sources and gathering the necessary resources of production factors for the development of industry in subsequent years . The implementation of large developmental infrastructure projects that improve land, air and other communications, transport logistics, electronic communications and energy infrastructure, etc. on the one hand, improve the conditions for the functioning of citizens in the economy as well as create better conditions for the development of enterprises and thus economic growth.
As part of shaping socio-economic policy, the state may adopt as strategic goals to achieve improvement in living conditions, improvement of the material, financial and housing situation of citizens as a minimum for a few years. In this way, the scale of leaving the country by young, educated people who go to more developed countries in search of an interesting, better-paid job. The improvement of living conditions, the improvement of the material, financial and housing situation of citizens is also a pro-development, pro-economic and anti-crisis factor for the national economy, because then consumption increases, which generates an increase in production on the domestic market. The implementation of this type of strategic goals of the state was described on the example of pro-development, interventionist and anti-crisis socio-economic policy programs conducted for over 3 years. In my publications available on the Research Gate portal, I described the principles and strategic goals of implementing and implementing socio-economic policy programs such as the 500 Plus Program and the Flat Plus Program (Flat Plus Program). The key strategic, long-term goals of these programs are to improve the material, financial and housing situation of citizens to the extent that the fertility rate in families is successively increased, and thanks to these pro-development socio-economic policy programs to counteract the adverse processes of rapidly changing demographic structure of the society involving the aging of the society . Other types of strategic goals planned to be implemented on a multiannual scale in many countries include reforms of the energy sector consisting in replacing classic energy sources based on burning minerals with renewable energy sources. Unfortunately, these pro-ecological strategic goals in some countries are implemented to a very limited extent.
I described these issues in my scientific publications on the example of pro-development programs of active socio-economic policy currently used with good results, which is part of the program package referred to as the Plan for Responsible Development, i.e. the Family 500 Plus Program and the Flat Plus Program (Flat Plus Program). In addition, maintaining a high quality standards in the field of financial system security, credit risk management, financial transaction procedures and customer service at financial institutions, including commercial investment banks, is a key issue for maintaining long-term high economic growth in the long term. I have also described these issues in my publications, which are available on the Research Gate portal. I invite you to cooperation.
Do you agree with me on the above matter?
Please reply.
I invite you to discussion and scientific cooperation.
Thank you very much.
Best wishes.
Dariusz Prokopowicz
I think the production of goods is going to cover the losses, to a large extent. However the same is not true for services sector all over the world.
The scariest scenario for COVID19 would be that the virus resists higher temperatures (due to mutation) and continues to spread even in summer days in Europe and USA. If this happens, the situation may well become worse than the one caused by Spanish influenza in 1918.
COVID-19 has had disastrous effects in China, South Korea, Italy, Iran, Japan, France, Germany, Spain, USA, Singapore, Hong Kong, and around 60 other countries, many of which are economic powerhouses.
The Question posed in this important and topical thread is rhetorical.
A simple response is : Yes.
Yes, world economy is at risk due to outbreak of coronavirus.
http://www.oecd.org/berlin/publikationen/Interim-Economic-Assessment-2-March-2020.pdf
Hopefully, this phase will pass away quickly, and we can move-on with life.
Corona virus can be taken as potential threat for world economy, however the effect may be for short term.
Health of a nation is the wealth of a nation. Many issues of life are interrelated in the deepest sense of macroeconomic theory and workings.
All nations of the world economy together with the International organizations must come together to find immediate solution to the current CORONA VIRUS scourge.
Some of the plausible solutions include: to ban international flights and cross-border travels to those countries where COVID-19 is ravaging; collaborate with the health authorities in Nigeria and possibly experiment the vaccines she used in curtailing EBOLA virus. Scientist should examine whether there has been chemical contamination in the region which the epidemics erupted and local herbs and traditional medicine need to be experimented.
Returning to our economic discourse the global economy may likely loose about 25 percent of reserve funds or annual production in 2020 alone is solution is not found with a quarter of corona virus emergence. Finally, every nation must make health planning, manpower and delivery their priorities - prevention is better than cure. Thank you
Absolutely yes. I think world's GDP will reduce and a global crisis will be occur. Actually this process has already started.
Covid-19 has affected travel and world trade in goods and services. Unless countries implement more spending or lower interest rates to help businesses to overcome these trying times, business bankruptcy will mammoth into crisis not in the individual countries that are affected but worldwide.
RECESSION normally comes as a shock, not with sign-sign tales like COVID-19. if the US economist provides an estimate of potential $50 billion reduction in worldwide GDP, then at least we have the target to achieve to maintain the current status on non-loss. Known risk is always manageable and minimizable. It is the unknown risk that is more complicated to manage.
PESSIMISM does not help any one but ending in defeatist attitude. the sooner the vaccine is obtained against COVID-19 the sooner we will achieve recovery even before we experience recession. No doubt there will be some dip in the productive capacity of the world economy, but not to the point of recession.
REDUCTION OF GROWTH RATE is not the same as recession. recession is "going backward" or negative growth. one year of reduction may not necessarily mean recession. Sustain consecutive loss of growth is recession. There will be negative effect on global economic growth yes, but not to the point of devastating recession.
That back to the global response to the pandemic, if chine back early to production and export, oil prices to be stable, no new foolish decisions from Trump. I thought everything will back to its nature quickly and recession collapse in the nearest time.
Yes, a recession in the global economy is possible 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. 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. At present, however, it is difficult to predict what the world will look like once humanity solves the problem of Coronavirus. 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. Cigarettes are considering quitting smoking to increase their 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 what the world will look like after the Coronavirus era. 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.
Best wishes.
Dariusz Prokopowicz
Tourism will be one of the sectors suffering the most from this pandemia. This situation is almost the same as the criminal cases in some countries, even worse. I expect another world economic crisis after corona virus pandemia.
Unfortunately, the recession is here https://amp-cnn-com.cdn.ampproject.org/v/s/amp.cnn.com/cnn/2020/03/16/economy/global-recession-coronavirus/index.html?amp_js_v=a3&_gsa=1&usqp=mq331AQFKAGwASA%3D#aoh=15844660011445&referrer=https%3A%2F%2Fwww.google.com&_tf=From%20%251%24s&share=https%3A%2F%2Fwww.cnn.com%2F2020%2F03%2F16%2Feconomy%2Fglobal-recession-coronavirus%2Findex.html
ECONOMY is defined as " a system of producing, distributing, and consuming wealth ." https://www.collinsdictionary.com/dictionary/english/economy
AS A SYSTEM it has a built-in mechanism to correct itself against shock. CONVID-19 is a knee-jerk shock that may throw the system off balance for a short-time, but soon the system will correct itself.
PANIC THINKING AND PESSIMISTIC OUTLOOK lack sound reasoning and sees little credit in the efficacy of how the economy function. The economy can survive wars. The world economy went through two major world wars and saw itself rebound sooner after the wars ended. With CONVID-19, the economy may see a short-term glitch and then gets back on track again.
Well, I heard that economic recession and extension global economic recession can be defined as consistent decline in economic trends (GDP) for (is it) three or four or more quarters (but not as many as ten quarters). In other words, it is a short term phenomenon. We can safely assume that many sovereigns have recorded economic contraction in 2020 1st Qtr - never minded the statistics are not published yet. However, the huge expenditure votes and disbursements and current spends on preventive measures for COVID-19 is already thinning (down) reserve revenues in many countries. A typical case is happening in one country that largely dependent on revenue from crude-oil exports. We learn that the fiscal budget is being prone down by about 25% or more; projected revenue from oil has gone down by about 40% and guess what; the domestic currency was devalued last week. Economic dislocation is now set in motion in the said economy and the process will run throughout the course of the year 2020. So, it is doubtful whether the prevailing economic situation in our reference economy can be self-adjusting as stated in the immediate past post. The speed of economic adjustment between policy pronouncements, implementation and realization of actual macroeconomic variables are rarely predicted with precision. This may also be experienced in other economies. Thank you.
The economic situation is going to be worst as many countries are making lock down, which will affect the overall production and consumption. Hence, the effect of the virus is significantly negative on world economy. However, in my opinion, centralized economies will not be getting less affected than decentralized economy @ Rajko Sekulovic ###Coronaeconomy
https://economicsociology.org/2020/03/27/the-probable-implications-of-the-coronavirus-crisis-david-harvey-william-davies-ivan-krastev/
The ~40 years dominance of the neo-classical economic ideology is over.
Am generally in line with Paul Louangrath
Always start with critical thinking and a little skeptical because talking about the global economy the ocean in itself, I don't see quick miracles, it all depends on the duration of the virus. At best it will look like a 'U' calculating the long time to arrive at the recovery period.
Dear Rajko Sekulovic
That's a controversial and tough question because the situation is weird and uncertain.
Economists usually recognize the crisis too late (after the end of the crisis).
There are 3 types of an economic shock in this time:
1) Trade shock
2) Supply shock
3) Demand Shock
Any of these can cause the recession.
Deleted research item The research item mentioned here has been deleted
The incidence of recession in Year 2020 and in 2021 is as certain as death. Many countries have already made budgetary allocation and disbursed billions of dollars from reserve fund to halt spread of the pandemic. USA and several other countries have voted trillions of dollars as economic stimuli packages to sustain the affected economies. Similarly, many countries have embarked on lock-downs of economic activities and one week of stoppage of productivity can equate two weeks GDP. Recession has occurred even if some countries may escape it by the global commercial centres and stock exchanges have experienced slumps. It does not require extotic computation to established the apparent recession.
As time flows, it seems that recession is inevitable... When I started this topic a month ago, it was more like worst case scenario.
Yes, due to the development of the SARS-CoV-2 Coronavirus pandemic causing Covid-19 in 2020, the global economy is likely to enter into economic recession. However, it should be a short-term recession and in 2021 significant economic growth will appear, a relatively large reflection of economic growth relative to the base effect of 2020. However, whether it really will be only a short-term recession depends on whether currently (April 2020) in most countries the pandemic has already reached its apogee or will soon reach and will expire quickly or not, and also depends on when effective treatment methods are developed, e.g. when the SARS-CoV-2 Coronavirus vaccine will be created. In this respect, it will be a special, unique global economic crisis.
Greetings.
Dariusz Prokopowicz
Economy s down through the world. Company are sacking staff due to inability to pay, and some are folding up. There is a great loss now.
Exactly. What economic growth means? labor is a key for economic growth. Labor stay without productive activities, no labor movement, lack or declined the consumption of basic goods and services. no movement of product input in fast way. No travil, no tursm, etc. most employee may got out of work this may cause both social, political and economic crises national or globaly. Most f government resource may got to protection of varis and so on. May increase food insucurity for that of poor countries like Africa.
Used in many home quarantines and many other anti-pandemic safety instruments have significantly slowed down and limited the development of the SARS-CoV-2 Coronavirus pandemic. At present, in many countries, the positive assessment of anti-pandemic and sanitary safety instruments is dominant. The prevailing opinion is that isolation, home quarantine and other instruments, systems, recommendations for anti-pandemic safety are important in the development of such a pandemic as e.g. the SARS-CoV-2 Coronavirus pandemic causing Covid-19 disease, because in this way it can be significantly slowed down the process and scale of subsequent infections and thus the development of a pandemic. On the other hand, the impact of the SARS-CoV-2 Coronavirus pandemic causing Covid-19 on the global economy is very large. The high probability of potential recession of the global economy and in many countries in 2020 is currently estimated. Well, in 2020 it is no longer trade wars that will be the main factor in the decline in international trade, international capital flows and other factors of production, international economic cooperation. In 2020, the main factor behind the decline in international trade, international capital flows and other production factors, international economic cooperation, etc. will be the development of the SARS-CoV-2 Coronavirus pandemic causing Covid-19. However, due to the anti-pandemic and sanitary security instruments used, the scale of pandemic development has been slowed down and reduced. Therefore, the recession of the global economy should last for a relatively short period of time. In many countries, the economic recession has already started, but it should not last a long time. In most countries, specific anti-crisis socio-economic policy programs have been used, including specific interventionist measures and instruments of central banking monetary policy and / or fiscal policy to reduce the scale of economic decline. these programs have already begun to operate in some countries with significant effect. Therefore, thanks to these anti-crisis measures and programs, the scale of the recession should be significantly reduced. On the other hand, in some countries the current economic crisis may turn into a long-term debt crisis of the state's financial system. These are primarily countries in which tourism and related services such as hospitality, gastronomy, etc. generate a significant portion of tax revenues to the state budget, i.e. these are sectors and branches of the economy whose share in the country's GDP is relatively high. In these countries, the recession, even if it is also short-lived, may be a long-term economic and debt crisis that remains after the Coronavirus pandemic.
Regards,
Dariusz Prokopowicz
The coronavirus is continuously spreading across the globe and causing rapid and great disruptions across world economies. The containment efforts towards the outbreak of COVID-19 has thrown international markets into turmoil following global restrictions on movements from governments around the world, leading to shut down of economic activities across many nations. Two major impacts stand out: first, travel restrictions, limiting demand for the use of jet fuel, supply chains slow and industrial activity declines as companies send workers home- meaning less oil and oil-based products are being used and produced. This has created huge job loses across nations. Second, the stock market reactions, leading to a crash across major markets following market sentiments about the health of the global economy. Kristalina Georgieva, the director of the International Monetary Fund (IMF) had announced that the World economy has entered into a recession, asserting that the economic fallout from coronavirus is already “way worse than the global financial crisis of 2008.” With more than half of global population- more than four billion people currently on lockdown or under some form of stay-at-home orders from national governments as at 3rd April 2020, the “stop-work-effect” on business activity globally has created an economic crisis “like no other”. Also, IHS Markit, a leading source of information and insight in critical areas that shape today's business landscape, stated that with disruptions to supply chains, demand, international trade flows, and travel, along with lockdowns and collapsing stock prices, resulting from the coronavirus pandemic, the IHS Markit forecast for world real GDP growth in 2020 has been revised down to 0.7% in response to the spread of the virus.
From our economic theories, we know that growth below 2.0% is classified as a global recession. As such, I can agree that the global economy has entered a recession following the coronavirus pandemic.
There are several channels through which an infectious disease outbreak influences the economy very much . Direct and indirect economic costs of illness are often the subject of the health economics studies on the burden of disease. The conventional approach uses information on deaths (mortality) and illness that prevents work (morbidity) to estimate the loss of future income due to death and disability. Losses of time and income by carers and direct expenditure on medical care and supporting services are added to obtain the estimate of the economic costs associated with the disease. This conventional approach underestimates the true economic costs of infectious diseases of epidemic proportions which are highly transmissible and for which there is no vaccine (e.g. HIV/AIDS, SARS and pandemic influenza). The experience from these previous disease outbreaks provides valuable information on how to think about the implications of COVID-19
At is worst, we should compare COVID19 with several plague pandemics in the late Middle Ages in Europe & Asia, where cities and countries were devastated. -- re: Boccaccios Decamerone. (Check this link: https://www.ancient.eu/article/1537/boccaccio-on-the-black-death-text--commentary/ ).
Several waves of plague over 2 centuries would fundamentally alter societies and nations in Europe; likewise the transmissions of diseases from Europe into America would devastate indigenous people and their societies.
At best it is only a seasonal flue that will whither away in time, or be neutralised via vaccines. Time will tell, but I fear the impact is bigger than just a flue.
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
Yes, due to the SARS-CoV-2 coronavirus (pandemic Covid-19 disease) pandemic, the economies of many countries saw a sharp decline in economic growth in the months March-June 2020. When in March 2020 the pandemic spread to other countries, then most prognostic analyzes suggested a strong recession, a decline in economic growth on a scale of even a dozen or so percent. in many countries and recession. Even for the global economy in 2020, a global recession was forecasted at the level of several works. However, it later turned out (May 2020) that the scale of the pandemic development is not as dramatic as originally forecast in the worst case scenarios of potential future events. Then in May and June 2020 in many countries there were symptoms of a slowing pandemic development and signals that perhaps the pandemic was entering the extinction phase. As a result, previous forecasts regarding the forecasted decline in economic growth were revised. According to the revised forecasts for the entire 2020, for most countries, declines in economic growth should not be minus a dozen or so percent but it should be at most minus a few percent. slowdown in economic growth. Thus, according to current forecasts (June 2020), the developing economic crisis will not be as serious as originally assumed.
Greetings,
Dariusz Prokopowicz
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