Human lives are endangered with the global pandemic of COVID 19 disease.185 countries are affected due to disease and over 6 million are infected. So, many countries across the world have initiated the idea of lockdown to contain this contagious disease. But the question is, what will be the effect of COVID-19 on the Global Economy? Well, the answer is according to sources and some financial committees, yes there will be some effects.
IMF(International Monetary Fund) has already announced that the global economy will suffer due to the post effect of lockdown. Many International organizations are monitoring the Recession and job loss because of this global phenomenon.
The analysis took place by the UN Department of Economic and Social Affairs, it said COVID 19 pandemic is disrupting the supply chain and international trade. It furthers that with many countries closed their borders, the movement of people and tourism has come to a screeching halt. Millions of workers across the world are facing the fear of losing their jobs and governments are making their full efforts to give COVID-19 relief packages for their financial loss. The DSA further added that the world economy had contracted by 1.7 percent during the global financial crisis in 2009.
What will be the impact on employment after COVID 19?
IMF has already announced that nearly 14billion people around the world will likely lose their jobs. This is due to the long-lasting lockdown and shutdown of many companies. There are many sectors in which there will be a huge sack of their employees. UN Reports added that sectors like tourism, Airlines, entertainment industries will be badly affected, this virus has become the nightmares who is working with these sectors?
What will be the impact on GDP?
This Global pandemic is not only taking the lives of thousands of people but also is a threat to Gross domestic product. Because the entire nation is in lockdown the production rate of our country is getting low day by day. This will severely affect the GDP rate. India's fiscal growth rate was projected to grow 5percent in the fiscal year of 2020-2021 but after this pandemic being entered in this country, it is likely to slow to 4.8 percent. But it was measured on 31st march when The lockdown was first measured.
The rapidity of this disease is increasing day by day and lockdown will likely to be increased, in this situation India will suffer more loss.
Is India in front of the economic recession?
The answer is unfortunately yes. Due to the long-lasting lockdown, the country is on the verge of recession. IMF reports said that there might be a chance of a global recession and it will be more severe than the earth faced back in 2008. Governments are slashing their interest rate and trying to stabilize the negative growth rate.
Is there any economic sector which will be benefitted in this situation?
Yes, there are some sectors whose profit margins will be high due to this global pandemic.
• The sector which will be in the most profitable list is pharmaceutical companies. Across the earth, there is
increasing in demand for medicines so the medicines pharmacies will be in great profit.
• The next sector will be online grocery companies. This sector is likely to have a big amount of profit merge
across the globe due to lockdown. Almost every market either restricted or people are afraid of getting out. So, e-commerce companies are in huge demand.
• All schools are closed due to movie 19 and almost all teenager is in their home. 80 percent of them are playing online games, so clearly, these video games companies will make their profit as high as possible.
• Due to lockdown everyone out there, suffering from boredom and maximum among them are watching online
web series to kill their time. No, doubtingly these production companies will be at high stake.
What should be the monetary and fiscal policy to handle this situation?
The government is trying hard to tackle this situation, but different economists have suggested different ways to
tackle this situation. Noble laureate Abhijit Banerjee said we must produce and inject more money in the market to tackle this situation. The more currency we print the better will be this situation could be handled.
Will there be any effect on crude oil prices?
Because of the long-lasting lockdown, the transport is busy hampered. This will affect the crude oil prices, though our government is trying to reduce the oil prices to balance this situation.
How long will this financial crisis continue?
IMF and WTO both organizations agreed to this point that whatever financial loss and global recession will be there, it will be temporary and will be gone after 1-2 years. It will be a boost after this recession.
After this global pandemic over the financial crisis will start, many people will be affected by this. European central bank added it will be a more crisis than the 2008 Great Recession. As because it is a threat to human lives all economic loss can be welcome but saving lives is far more important now.
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