John Giorgi explains the ongoing COVID-19 outbreak has spread at an extremely alarming pace, infecting countless and bringing the economic activities across the world to that near-standstill. Countries are imposing stringent restrictions on movement and declaring social distancing for bringing the spread of this deadly virus to a halt.
With the growth in human and health, the global economic damage is already evident and represents the biggest economic shock that the world has undergone in decades. This outbreak has affected nations enormously, particularly the lockdowns nationwide that have brought the economic and social life to a halt. A world buzzing with activities forever has fallen silent. Every resource is working to cater to the crisis that we have never experienced before.
The Global Economy Has been Hit Hard, Says John Giorgi
The COVID-19 crisis has pushed the economy worldwide into a recession, which means the economy’s beginning to shrink and a stop in the growth. COVID disruptions have led to unemployment for countless people. Again the manufacturing output in the majority of the countries across the globe has gone done. It throws light on reducing external demand and the increasing likelihood of a fall, particularly in domestic demand.
The global shock of the COVID-19 pandemic is like no others, according to John Giorgi. It entails simultaneous disruptions both in demand and supply in the world economy that is interconnected. Regarding the supply side, social distancing, business closures, and lockdowns have caused supply disruptions, and the fear of infections has reduced productivity and labor supply.
There has been a loss of income regarding the demand side due to unemployment, quarantines, morbidity, and layoffs. The worsened economic prospects have reduced the investment of firms and household consumption. The extreme uncertainty regarding the magnitude, duration, and path. And the effect of the crisis has posed a vicious cycle to dampen business, consumers’ confidence. And also tightening financial conditions that had led to a loss in investments and job losses.
Consequences of Coronavirus on the Global Economy
The imposition of social distancing and lockdowns to stop the deadly virus from spreading has slowed down. The global economy that directly impacted its GDPs, especially emerging economies. Top businesses and major industries have been disrupted following the suspension of various transportation services, including trucks, buses, railways, flights, and other mediums of private and public transport.
Entire economies consequently came to a stop. The pandemic has left so sector untouched. Workplaces and educational institutes transitioned to digital and remote spaces, and the tourism industry came to a halt. A good number of countries are currently facing an increase in unemployment. And a threat to a high inflation rate due to rising healthcare expenditure and decreased productivity to curb COVID-19.
During the midst of this crisis, it is difficult to predict which changes people will forget quickly and become permanent. The world has undergone a drastic change with an uncertainty of when the crisis will pass. So what people can do is cooperate with their governments and practice social distancing actively to stay safe.