Economic Impact Of Lockdown
The Coronavirus outbreak has brought the world to a stand still. With many countries imposing lockdown to tackle the virus, people are compelled to stay at home leaving their work and businesses. More than 280 countries are affected by coronavirus and businesses are left to count the losses. This has a dwindling effect on the international economy. Shifts in the stock market can affect values of pensions and interest rates of savings accounts. All the major stock markets in the world have seen a huge fall.
The government across the world is focused more on combating the virus and saving lives. Health spending is more and has affected other economic development in the world. Spread of coronavirus will decline the economic growth if there is not enough action to overcome the situation. Economy boost will happen through spending and the banks all over the world decrease the interest rates that will encourage borrowing. Not until the pandemic is contained, the global economy will remain volatile. The government around the world are announcing economic aid to help businesses and resurrect the market, but the effect is yet to be analysed.
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Slowdown Leading To Weak International Economy
Lockdown has made major industries to halt production. China was the country where the coronavirus initially spread. It was seen that the investment, sales and industrial production had a huge impact in the first three months of the pandemic. Restriction in the Chinese markets has affected the supply chain of large manufacturers and industries. As China holds one third of global manufacturing and is also the world’s largest exporter of consumer goods. Industries that were dependent on China for its production started feeling the pinch when the coronavirus hit the country. Major companies like JCB, Nissan and more have been seeing a fall in production and demand.
Unemployment has hit new records all over the world. More than 30 million people in the United States have filed for unemployment benefits during the last few weeks. In the United Kingdom, about one million people have applied for benefits after the pandemic outbreak. Closure of non-essential shops, restaurants and pubs has increased the credit applications globally. Coronavirus has driven the crude oil price to its lowest till date. As lockdown has kept people away from travelling, oil demand is considerably lower than before. Brent crude which is used as a benchmark has dipped below $20 which is the lowest since 18 years.
Recession Around The Corner
A growing economy results in creation of new jobs and wealth fuels economic growth. In a dwindling international economy, cost will surge so is the first if going businesses make people to go out of job. Economy is determined by the percentage of change I’m gross domestic product in a period of three months. It also depends on the value of goods and services produced during the time period. International monetary Fund States that the global economy will go below 3% this year. Major economies like China, Canada, France, Germany, Italy, US, UK and Japan will go into recession starting this year.
Economists state that it will be the worst decline since the Great Depression since the 1930s. The pandemic has created a crisis like no other. To some extent technology has come to aid employees who can work from home. Applications like Zoom are used extensively to conduct meetings, video conferences and to vet tasks for. This ensures completion of projects and closure of finances. There is a surge in online shopping and entertainment as people stay indoors. Travel industry was badly hit as airways, railways and road transportation were banned due to travel restrictions. One positive effect of lockdown is the visible reduction in pollution that has made the atmosphere, water and the environment clear from emissions.