With cases increasing on a day to day basis, the world has seen and experienced a downfall in the global economy like never before. Read further to know more.
Introduction
WHO declared COVID-19 as a global pandemic when escalating number of cases were registered all over the world. Countries resorted to prolonged periods of lock down to ensure physical distancing. This has restricted many economic activities. Many countries have seen a sharp rise in unemployment. In US alone, a record high of 7 million people are seeking unemployment benefits. Subsequently, this number is twice of what it used to be before the pandemic.
Effect On Global Economy
Above all, the global stock markets have crashed by around 30% since the start of the year in most of the world’s rich economies. In addition, many countries’ economies were already slowing before the pandemic, and now we see a threat to push them into a steep recession. A profound impact on global economy has been observed in a truly short space of time.
Here is more on how the world has suffered with unemployment during the lock-down.
Multiple institutions predicted that the global pandemic will leave result in a global financial crisis. Some economists claim that Europe is looking at the worst economic crisis in 100 years. Following, In April, an official from the International Monetary Fund predicted that the contraction in the global economy is getting worse. The economy has become than the 2008-09 financial crisis. The governments were urged to take swift action to limit the damage of livelihoods. This sort of an economic crisis is unprecedented. Nothing can be asserted with certainty. It’s impossible to predict how long it will take to tackle Corona-virus and safely lift the movement restrictions will play a major role in determining the fate of the economy.
Beliefs and Methods
Some experts take an optimistic view of the situation and believe that the economy will rise just as fast as it fell. Others seem to be of the opinion that if the governments take swift and collective action, the effects can be cushioned. Central banks and governments should provide adequate loan guarantees, extra liquidity, and easier access to credit. Taking proactive measures to safeguard the most affected people and firms will make the economy stronger.
Conclusion
For countries to cope with the pandemic, an initial package of $12 billion in loans was announced by the world bank in March . Several projects of the World Bank were successful in giving relief to over 100 developing countries, nevertheless, the economy still sees a downfall around the world.
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