Impact To Global Economy Due To COVID-19

COVID-19, the virus is spreading rapidly. 

Time is passing and the impact of it is amplifying. The COVID-19 outbreak occurred in December-2019 and is forming an unignorable impact on the economy. Overall 190 countries are affected by it. A heap of countries thus far struggling in spite of more than 4 months. The government has dwelled on the situation.  The reason being the number of cases rising at high speed and there is no vaccine to prevent the spread of it. Currently, the total cases are about 5 Million with over 300,000 deaths worldwide.

Several countries decided to lockdown in the whole country resulting in the shutting down of business. Due to this, the unemployment rate is uprising. The global economy has gone down from around 3.0 percent to around 2.4 percent.

The economy affected by the COVID-19 is the reason for the large fall in demand. That means there are no consumers to purchase commodities, and services available in the global economy, other than essential items. This scenario shows how massively businesses are affected such as tours and travels. To reduce the impact of the virus, the government made restrictions on travel. As a result, no one can purchase flights for any reason. The reduction in consumer demand and losses in planned revenue had to bear by businesses.  Subsequently, airlines did cost-cutting by laying off the staff. The same circumstance happened to other industries. Each industry is laying off the staff to reduce expenses. Unfortunately, this creates a spiral where currently unemployed workers can not afford to buy any goods or services.  As follows, this pandemic is leading towards the global economic recession.

Some Of The Most Affected Industries That Are Leading Us Toward A Global Recession.

1. Tech:- IT industry is working remotely but despite this, they are bearing the problems and losses. Many conferences are getting canceled while some are on hold. A new partnership that was going to form, unfortunately, will not be formed. This has led to significant business losses. Some major events were canceled by the cause of COVID-19. For example - Facebook had canceled the conference of F8 developers. Companies have incurred losses of over $1billion. Lastly, the number of clients has also started decreasing.

2. Retail and eCommerce:- According to the prediction, loss in the global retail sector will touch $2.1 trillion in 2020. Malls and shops have been shut down and people are also avoiding crowded places. People are preferring online shopping but it is challenging for businesses to provide customer services during this pandemic. While the people with unemployment refusing the eCommerce services. Some eCommerce services for essential products such as food and grocery are selling at affordable prices. At the same place, the sales of non-essential products have fallen from around 40% to 60%.

3. Tour And Travel:- As mentioned above that is how policymakers restricted the airline and other traveling methods. And what steps airlines are taking steps for cost-cutting. How these decisions are affecting the global economy and how the number of unemployment increasing.

4. Sport and Entertainment:- The virus first was diagnosed in  Wuhan, a city in China. Now people are infected across the globe. This has led to canceled or suspended sports events across the globe resulting in the loss incurred by the entire nation. Likewise, the entertainment sector has canceled or postponed their events. Companies are bearing a huge loss. Even daily wages workers have lost their jobs.

Some Global Statistics

• At the beginning where the unemployment in the US was between 0.2 million to 0.3 million till March, it crossed 4 million after that. 

• In the US the highest unemployment rate had by leisure and hospitality that was 39.3 percent.

• In 2019 the global real GDP grew by 2.9% while in 2020 it will decrease by 0.5%.

• Revenu of the Tour and Travel industry decreased by around 34.7% as compared to the previous year.

• The global chemical production is declined by 3.1% in March

• As per the latest forecast, projecting will have negative growth that is around 9 percent in 2020.

• The range of poverty has grown from 85 million to 420 million globally.

• In the US retail sales fell 8.3% from February to March. Afterward, it fell by 16.4% from March to April.

• The US oil price first time turned negative, to -$37.63.

It is clear that the global economy is in danger however still, there is a hope that the worst-case scenario can be avoided. This pandemic is affecting the global economy so hard that it will take many years to recover.