The world is facing a catastrophic situation with the outbreak of
The ongoing spread of the Covid-19 has become one of the biggest threats to the global economy and financial markets. The
The epidemic has led to travel bans all over the world. Countries have been on lockdown from the outside world and within. Trade, businesses and commerce have been severely affected putting the brakes on the world’s economy. A global economy stagnation has become a real thing now.
Cost of coronavirus for the world’s economy, according to the UN.
The impact of
- The slowdown in the global economy due to the global pandemic is likely to cost at least $1 trillion.
- According to UNCTAD, the fall in oil prices has been a contributing factor to the growing uneasiness and panic.
- The report states that the government should spend more at this time to prevent the meltdown later.
- According to the report, the current situation is similar to the ‘doomsday scenario’ in 2008-2009 when the world economy grew only by 0.5%.
- Heavily-indebted developing countries face a particular threat, specifically commodity exporters.
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How is COVID-19 exerting an influence on India?
According to UNCTAD predictions, India will be the 10th most-affected economy due to the supply chain disruptions in China. The slowdown in consumption, travel bans and other restrictions are interrupting the growth and have a toxic impact on the economy.
- The Indian economy is estimated to grow at 5% in current economic conditions, the slowest in 11 years.
- The aviation sector has reported up to a 75% drop in international bookings and a 20% drop in domestic bookings.
- Shaktikanta Das, the governor of Reserve Bank of India says, ‘India is relatively insulated from the global value chain and to that extent impact on India will be less, but India is integrated into the global economy, so there will be some impact.’
- The exports have been negatively affected due to the lockdown with India’s leading trading partners such as China, Italy (the most affected countries due to Covid-19) and Germany.
- Recession in jobs mainly in labor-intensive sectors such as handicrafts and gems and jewelry because of state-wise lockdowns.
The outbreak has slowed down the already slow economic growth. The pointers reflect how the virus has caused a significant drop in economic activity across the country.
Conclusion All in all, the outbreak of the virus can be considered a Black Swan event, which is an unanticipated problem with severe consequences. We can achieve viable and effective results if coordinated precisely internationally. Let us treat this complex global pandemic together.