Coronavirus has brought the most abrupt economic collapse in recorded history.
Within a short period, lives have been transformed, and disruptions have been experienced in various business sectors. Governments have rolled out the economies due to the de-globalization in goods and trade.
To reduce the further spread of the virus, governments across the globe were forced to implement health measures to lockdown countries. The lockdown included shutting down schools, closing down businesses and workplaces, limiting gatherings, and restriction of movement to other countries. These measures have highly affected the global economy hurting various businesses and causing joblessness.
Due to this, there is a growing fear that the world is not just about to face the usual inflation. Various economies are expected to face upwardly spiraling prices.
The government has been at war with the pandemic and fiscal deficits, thus shutting down the economy. We are not sure as to when the virus will be completely contained, but health specialists are saying it may take up to 2 years. For this reason, there is great uncertainty of how the next months will be and the path our economy will take in the years ahead.
How the Pandemic has affected the Global Economy
The outbreak of Covid-19 has disturbed the political, economic, financial, social, and religious sectors all over the world. In less than a week, it was noted that over 3 million Americans applied for unemployment while 6 million started to seek new jobs. The pandemic has affected even the topmost economies in the world, for example, the United States, China, United Kingdom, France, Germany, Japan, and Italy.
Economies are on the verge of collapsing, as most countries are experiencing inflation. Financial experts are warning people and asking them to prepare for the worsening conditions in both the global economy and financial structure.
The spread of the virus is picking up at a higher speed and causing more economical damages. A lot of businesses have been forced to reduce operations or even shut down while thousands of people are expected to lose their jobs.
The service industry has also been hit by the pandemic. Most countries have reported a decline in retail sales as many stores have remained closed, and consumers now prefer online shopping. There was an increase in online sales, even though most people don’t want to resume normal spending.
Australian bettors also now prefer to bet at Aussie online casino to enjoy their favorite casino games.
Global inflation, even in the wealthiest countries, has collapsed at a higher rate. The inflation rate has dropped from 2.3% in February to 1.7% in March. This is the largest deceleration reported since the financial crisis in 2008.
Janet Henry, a chief global economist at HSBC, warned that inflation could soar if the government and central bank continued to offer support to businesses and households for spending. This will cripple the economy, which has already suffered overestimated damage to the global supply chain due to the pandemic.
How Countries are Responding to the Crisis
With many government authorities freezing the social and economic activities in the country, most of them will suffer great declines in the trade this year. Some countries have slowly started to reopen their economies with other loosening restrictions.
To preserve the well being of citizens, governments must provide social insurance to help those in need. Most businesses have deferred some tax payment so as to keep afloat, and this has highly affected the economy.
What everyone thought they knew about the global economy and finance has been radically disturbed. Inflation is always a challenge to measure, and its nearly impossible to measure during this pandemic!