How Coronavirus Epidemic Impacts the Global Market?

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The situation with the coronavirus pandemic has forced many countries to proclaim a lockdown, which means that most people are forced to stay at their homes for most of the day. It looks like the situation with the pandemic is slightly calming down. However, there are more than 1 million people infected, with around 330,000 recovered, and near 90,000 deaths.

There are different forecasts on the impact of isolation and quarantine on all world economies, and everyone is aware of this situation and how serious it is. It looks like a great part of the global economy just stopped, with limited import and export of goods. Also, every worker cannot work from his home, and this outbreak caused many people to lose their jobs, or stay home and get some compensation, which is a better case.

Small and medium companies are the ones that suffer the most, especially tourist agencies, small stores, restaurants, hotels, and many more. Only companies that developed their businesses on online platforms have managed to work without problems, though they were only hit on a smaller scale. That is one of the main reasons why so many people are searching for such solutions, to work online from their homes. If you are a developer, designer, or have business skills, you can find a job on some online platform like Upwork. Also, if you consider yourself a skillful trader and see how to become financially stable by being active and successful in various financial markets.

Furthermore, we can see that there are great oscillations and falls of global markets, which has a huge impact on shares of big corporations, but also in various types of funds of average people. Also, the growth of most economies is on hold, and countries are developing various strategies to properly recover their economies when the pandemic is over. In this article, we are going to present to you the greatest challenges of the global economy, and what are the levels of impact from COVID-19 on it.

Impact on Production

Source: Business Insider

The main problem with world production is because there are many fabrics locked in China, which is the place where most of the companies across the world are importing various goods that are crucial for their businesses. For example, the car industry is under a huge impact, since most of the manufacturers are closed, and sales dropped significantly. On the other side, even the manufacturers who are still producing vehicles will soon run out of equipment and components that they were mostly importing from Chinese producers.

The situation with the industry of technology is also challenging since China owns more than 30 percent of share in that market. Both the macro economy and small businesses are hit by the lockdown, and that situation will require some delicate measures from countries. Some countries already came up with some short-term solutions, like the United States, which is planning to spend 2 billion dollars on the recovery of their economy.

Restricted Traveling

Source: Travel + Leisure

There are more than 100 countries who introduced travel prohibitions, which greatly damaged the travel industry, along with the tourism, flight companies, and many resorts and restaurants that depend on tourism. The European Union has introduced measures where no one could travel to the EU for a period of 30 days. On the other side, the United States forbade flights from Europe. According to some researches, the number of total flights worldwide fell from around 200,000 to near 50,000 per day.

Many flight companies, hotels, and restaurants are now forced to lay off workers to avoid bankruptcy. Smaller resorts, tourist agencies, and restaurants are under the greatest challenges since many of them are unable to bear more than one month under lockdown measures.

Impact on Global Market

Source: forbesimg.com

Many experts are warning us all that the global economy will get under another recession, which will maybe be worse than one in 2008. Many indications prove that, like the decreased value of bonds, and fall in the price of many assets. Global Economy is vulnerable at this moment, and there are three possible impacts of the recession on it, The Real Recession, which is caused by lack of goods and production, Policy Recession, where banks will be forced to raise their interest rates, and Financial, that will cause enormous economic misbalances globally.

If the pandemic doesn`t pass soon, there could occur some great changes in the global market, with a fall in the price of houses and apartments, poorer consumer habits, lower production, and much more. Also, since people have to adapt to the current situation, we can see the rise in online shopping, especially on some of the biggest platforms like Amazon, eBay, or Ali Express. Along with that, many countries have implemented online platforms for students to don`t miss all their lectures, and there are many other spheres where we can implement digital technology.

The Biggest Consequences and Methods of Recovery

Source: CallMiner

Well, there are two main scenarios related to recovery from the coronavirus pandemic, and both of them rely on the time what is needed for this virus to stop being a global threat. In the worst case, where industry stays locked for a longer period, the negative impact will be much dangerous, since more companies will be forced to stop their production and trade, which could lead to serious consequences, especially companies that depend on imported goods.

However, we can see that the situation is calming down, and there are less infected people every day, and some countries managed to keep the COVID-19 pandemic under control, like South Korea, where people are rapidly recovering. If states withdraw lockdown measures by the end of the month, the activity in many industrial sectors will rise again, especially in China, that represents the biggest producer of various raw materials that are crucial for production. With continued production and activation of all parts of global economies, along with the planned measures from many countries to support their economies, companies, and small businesses, the recession will surely be avoided.

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