Card image

The Economic Consequences of Covid-19 in The World Economy

The economy has always been a broad, dynamic and ever-changing landscape. As of now it faces an almost unprecedented scenario. The Covid-19 poses a unique threat to the world economy as we are caught in a juggle between life and livelihood. Proactive economic measures are vital to counteract the situation and limit the damage it can inflict.
Impacts of Covid-19:
To understand the future consequences of Covid-19 it is essential we realize where we actually are at this point in time. About 3.9 million infections have been confirmed in at least 187 countries and territories. The world has come to an absolute standstill. Lockdowns and quarantines have stopped the flow of lives around the globe. At this rate, the world economy is set to hit record lows. The International Monetary Fund recently announced the “Great Lockdown” recession will drag global GDP lower by 3% in 2020. Covid-19 is a double edged sword as whether the virus itself or its effects on economy is the more dire of two is a very difficult to determine.
Threats Looming Large:
Two key that points in case of any disaster are the length and degree of devastation it can cause. Simply how much and for how long. The future seems to hold all the cards. No sign of the scenario lighting up is anywhere to be seen in the near future. The uncertainty around the fact that how long the outbreak will last is making calculations regarding the possible damage it may inflict in the foreseeable future much more difficult. But it is safe to say that should the pandemic last through 2020, the world economy will emerge with extremely modest gains the following year in a sluggish rebound. An economic fall out is on the horizon, supply of products especially that of food and other essentials is set to hit historic low, judging by the rate at this point of time. Simply put there will be a huge drop in the cumulative global stocks . The graph below can better illustrate the scenario as it shows the relationship between global stock and Covid-19 cases
Gloomy Decisional Demographic:
Lack of employment can be singularly identified as the gravest economic proposition. As Covid-19 has forced shutdowns globally, this is however an imminent reality. The economic freeze could cost 47 million jobs and send the unemployment rate past 32%, according to St. Louis Fed projections. Governments are considering and rolling out large stimulus packages to avert a sharp downturn of their economies which could potentially plunge the global economy into a deep recession. Prices of essentials will sky-rocket if not monitored properly, the number of people suffering from hunger could go from 135 million to 250 million globally. The policy makers around the globe are caught between the devil and the deep blue sea as the balancing act between fighting the virus itself by implementing shut downs and dueling the devastating economic impacts of the shut down is proving to be a jigsaw of the ultimate kind.
The World Reacting: Proactively
Evolve and adapt. The almost prehistoric tools of survival. In these testing times The economic demography is starting to evolve in an attempt to survive amidst the crisis. To put things into perspective, where almost all the leading companies around the globe are laying off workers, Amazon, world’s leading online corporation, is hiring around 75,000 workers to cope with the increasing demand of online services. We have heard of the world shifting online for quite some time, however, amidst all the doom and gloom Novel Corona Virus has brought along, it might just be the catalyst of a historic change in the way the world works.
Final Word:
Covid-19 will leave another glorious chapter in the illustrious history of man's struggle against nature. Economically it will hamper humanity’s progress by a number of years that is yet to be calculated. However it will probably signal the dawn of the new digital era. The world, to a certain extent, will be changed perpetually.