The Outbreak of Corona Virus and its Impact on the World Economy
One of the leading causes of death worldwide includes the infectious disease “Corona Virus” which accounts for 1/3rd rate of mortality. Due to urbanization, globalization, traveling from country to country, trading of goods and services across continents, improper usage of antibiotics, reviving pathogens and changes in human behavior pharmaceutical industries are failing as infectious diseases are rising more than ever.
The outbreak of corona virus in December 2019 (Ciotti, at el., 2019) is an example of the spread of infectious diseases quickly due to open economies that have threatened world economic stability. This is more contagious amongst people and it is more prone to continuous evolution as a recurring threat as the resistance of microbes to antibacterial agents makes it a returning risk.
This outbreak resulted in the form of restrictions on the movement of trading goods from country to country and people for traveling and other variety of economic activities. There was the declaration of national emergencies in North America and other European countries in its first phase. National healthcare systems were strained due to the increasing demand for emergencies. It has disrupted the international trade and global supply chain system.
Corona Virus and its Impact on the World Economy
A hundred countries have closed their national borders which has caused an abrupt halt in the flow of tourism and movement of people thus greatly impacting the tourist industry worldwide. Leading economies have a downturn in GDP from 3.0 to 2.4 percent. Global GDP in 2019 got an estimated 86.6 trillion U.S. dollars which means a decrease of 0.4 percent in economic growth will result in 3.5 trillion U.S. dollars in economic output lost. This was estimated before the global pandemic outbreak spread across 100 countries.
This pandemic have also heavily impacted school, colleges and universities. According to UNESCO (United Nations Educational, Scientific and Cultural Organization) 800 million students have been affected around the globe. Out of 1 in 10 learners were not able to attend school. Over 102 countries have closed their schools nationwide. This has shifted the education sector to online learning by many universities. Students started a significant focus on academic tutors available online and online academic help platforms such as Humanities assignment help sources etc.
Global Corona Virus Report
Globally, covid-19 “Corona Virus” has reported 200,000 cases of affected people in more than 160 countries. Causing 8,000 deaths immediately after the outbreak. Pandemic has an immense negative impact on government spending for the education sector. Thus, urgent attention is required along with collective action by stakeholders, government, and communities.
The problem with these predictions was the uncertainty of this virus’s survival. And how governments of these countries will be able to deal with the emerging cases. Businesses have the potential threat to survive in this uncertainty as this new virus’s longevity, vitality and endurance can’t be predicted.
There was an argument broke out that whether to label covid-19 as temporary or permanent. A temporary view will mean that this virus will not have a lasting impact on the world’s economy as it will pass in a short span of time. Tremendous Fiscal and monetary expansion programs will have the ability to keep the economy afloat in the interim in western countries. Their government is socializing balance sheets with the costs of economic hibernation. In the aftermath, government debt will be increased greatly. But this can be sustained with the low borrowing costs.
Although covid-19 has affected the whole economy but there are three sectors which got effected the most for businesses. These three aspects are mentioned below.
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Impact on production directly
Worldwide production has come to a halt due to the shut down of the national borders of many countries. Domestically restriction has also been placed on the movement of goods which has cause a substantial effect on the production processes. Many other countries have also begun to know the direct impact as their government authorities have placed the same measures. Lock-down was call throughout the countries and slow-down exports to other nations. World Bank predicted the impact of this to be consistent in the upcoming years for a while.
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Market disruption and supply chain
There are various manufacturing firms that rely heavily on the imported intermediate goods input from other countries and China that are heavily affect by covid-19. There are certain countries that are relying on sales in China to meet their financial goals. Transportation restrictions and slow-down of other economic activities have impacted the supply chain and profitability factor for global companies, especially in manufacturing industries.
Businesses have turned to E-commerce after the covid-19 outbreak (thedissertationhelp, 2020). People used to buy online as a luxury before but now this is becoming the new business model for many businesses for survival. Already existing online business like Amazon was heavily affect by the covid-19 outbreak. But other online stores like Walmart have a huge increase in their sales. Further many such online platforms that provide academic services like BTEC Applied Science Help Company made huge revenues during this pandemic.
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Financial impact on financial markets and firm
Firms that have inadequate liquidity may stress out on temporary disruptions of input and output. In financial markets, traders will be very confuse about the vulnerability status of many other companies. Key financial market players who have taken unprofitable investment positions might further upset and weaken the trust of other financial players in doing investments in the financial market. International Monetary Fund’s January outlook has shown a downturn in October figures of return in these leading economies. Covid-19 have a change in the forecast scenario for the upcoming year and this needs to be revise again.
To conclude covid-19 “Corona Virus” has impacted overseas businesses, the tourism sector, educational sector, supply chain, and financial markets. It has a continuous influence on our lives and businesses. World economies need to adapt according to the pandemic for future growth and survival.
References:
- TDH. 2020. Buying behavior after covid-19. Online Available at < https://thedissertationhelp.co.uk/buying-behavior-after-covid-19/> [Accessed on 1st July 2022].
- Ciotti, M., Angeletti, S., Minieri, M., Giovannetti, M., Benvenuto, D., Pascarella, S., Sagnelli, C., Bianchi, M., Bernardini, S. and Ciccozzi, M., 2019. COVID-19 outbreak: an overview. Chemotherapy, 64(5-6), pp.215-223.
- TDH. 2020. Buying behavior after covid-19. Online Available at < https://thedissertationhelp.co.uk/buying-behavior-after-covid-19/> [Accessed on 1st July 2022].
- Ciotti, M., Angeletti, S., Minieri, M., Giovannetti, M., Benvenuto, D., Pascarella, S., Sagnelli, C., Bianchi, M., Bernardini, S. and Ciccozzi, M., 2019. COVID-19 outbreak: an overview. Chemotherapy, 64(5-6), pp.215-223.
