Impact Of COVID-19 On Global Economy
The fears of a global economy entering a recessionary phase are increasing thanks to ever-rising cases of COVID-19 around the world.
As on Sunday, over 300,000 cases of the transmittable infection caused by a novel strain of COVID-19 were registered across the world, while over 13,069 people have died so far due to the virus.
Further deaths in Europe exceeded those in Asia where the virus first came to light, which shows that the virus is spreading faster than estimated thus far.
Apart from precious lives the world is losing because of this horrible virus, the global economy is also in peril now with vital sectors ranging from tourism, travel to technology, getting drastically impacted.
World's largest economy, US, closed its doors to Europe to control the contagion even as China, considered as the global factory, is still battling the after-effects of the virus that originated inside its territory. There are ample indications that the global economy is heading into a recession.
According to a report by The Economist Intelligence Unit (EIU), global economic growth is likely to shrink to a mere 1 percent from an earlier projection of 2.3 percent in 2020 and 4 major economies including Japan, Italy, Germany, and France are expected to experience full-year recession this year.
The International Labour Organization estimates that Covid-19 will destroy up to 25 million jobs. According to the United Nations Conference on Trade and Development (UNCTAD), it will likely cost the global economy between $1 trillion and $2 trillion in 2020. Even when the pandemic had affected only 30 people in India in early March, UNCTAD said the trade impact for the country could be about $348 million.
On the economic front, there is a need for effective stimulus measures to protect the sectors most impacted by the virus. The aviation sector is bleeding. So are the hospitality and tourism sectors. Other sectors will also be in the firing line. As a consequence, millions of people will be rendered jobless in the near future as companies will struggle to generate enough revenues.
Without stimulus measures, it is not easy to restore normalcy in the global economy. And India is not immune to all this as virus cases are steadily rising in the country. It is time for proactive steps to allay fears and put economies back on a higher growth track!