The economic consequence of the coronavirus pandemic will be sensed far above the instant effect of the virus. During the spread of COVID-19 in China, people in other parts of the world ignored the consequences until the time it hit them hard. Global financial markets responded powerfully last week when they felt the spread of the virus drastically. It spread across Europe and the Middle East, which took away many lives and left many others infected.
People are so worried about the global market and feel that they will soon face a massive recession in the worldwide economy. Many Business tycoons have questions in mind, including what the scenarios would be and whether there would be any chances of recovery. They are also concerned whether they would see any possibilities of growth or not. Many leading business leaders can be found on TheB2Bcrowd, connecting to improve their trading pattern regardless of the COVID-19 outbreak.
But the truth is that all these questions cannot be answered during these unfold crises. There is no one around the world who could answer or foresee the economic impacts of COVID-19.
How Bad Are The Markets?
Last week the severe decline in the global financial markets had resulted in people believing that the world is on the path towards recession. Estimates of safe assets have risen abruptly, by means of long-term US government bonds deteriorating to close record depths at negative 116 basis points. This shows that investors are desperately willing to spend for the safe harbor of US government debt. Due to this, mechanical representations of recession danger have marked higher.
Unemployment Has Taken Down Many Families
As businesses have shut down, for instance, restaurants, business owners had to let go of their employees. They can’t afford to pay salaries in such bad crises. New unemployment claims recorded last week reached up to 281,000 due to the coronavirus pandemic, which closed businesses and left many people helpless. The number is increasing each day significantly and is expected to be double next week. Many Packaging Machines Importers are also facing problems in finding the right suppliers.
In addition to that, many European countries’ government have moved their hands forward to provide aids to businesses. They have taken such a wise step to prevent employers from firing any employees or workers during such a crisis.
In the UK, the government has announced every employer to pay 80% of the wages to workers if they are kept on the job.
Travel Industry Faces Heavy Crises
The travel industry has been severely smashed due to the airlines being banned, and tourists canceling off their trips. All governments of different countries have restricted anyone from entering the country to prevent the spread of the virus. The EU was restricting travelers from entering the country and sealed the borders for 30 days because of the coronavirus crisis.
Experts have estimated that more than 48,200 air travel along with 10.2 million seats could be impacted due to the restriction, with the significant effect dropping on Air France.
Trump, in the same way, has banned travelers, especially from European countries, to enter the borders of the US.
What Will Happen Next?
The shock and crises faced by the global economy have been more sharp and severe than the 2008 global financial crisis and the Great Depression. The rate of unemployment has declined severely. Not even the previous two disasters caused such a bad shut down to the economic activities of the US, Europe, and China.
But to get things back to normal, profoundly affected markets and countries would have to work to provide their individuals with a better treatment to fight against COVID-19. Proper testing and treatment measures taken by china would help every state to get rid of the virus. Secondly, monetary policymakers can add to make a change, for example, by delivering zero interest rates. Thirdly, governments of countries must arrange an enormous fiscal stimulus, including offering help to individuals through households. Only the central government can help the private sector to get back on its legs.
No one knows how long the virus would continue and how people would get out of these crises. But with the help of every nation, the global crises could get recovered. China got rid of the problem, but they locked the country for three months. Every country should learn and take strict measures to improve their conditions as well.