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| IMPACT OF COVID-19 ON ECONOMICS | | | Umah-e-Roman | 7/18/2021 12:18:10 AM |
| A year and a half since the onset of the COVID-19 pandemic, the global economy is poised to stage its most robust post-recession recovery in 80 years in 2021. But the rebound is expected to be uneven across countries, as major economies look set to register strong growth even as many developing economies lag.. As we all are aware that this Covid-19 is a global pandemic and it was on March 11, 2020, the World Health Organisation characterised it as a pandemic. It has been one of the major devastating biological disasters that has caused millions and millions of deaths. It not only caused public health crisis but severely affected global economy. During this outbreak significant reduction in economy has been seen due to severe loss of life, rising cases of unemployment, interruption in business sectors, disruption in transportation , services, industries etc. We can not neglect how it severely impacted economic condition at both international and national level, as well as at individual level. If it comes to individual level , those who were labourers and were totally dependent on day to day money making got badly affected. Many committed suicide out of depression as they were not able to feed their family, their small children. The grocerers, the hawker man , the small shop keepers were mentally affected as they were not able to earn money . In my opinion , this pandemic although affected every class of our society but what poor people faced and went through was extremely heart wrenching.
Due to lost productivity , business closures , trade disruption and decimation of tourism industry our economy has been badly interrupted. Pointing to over 3 million cases and 207,973 deaths all over , Covid-19 has become a wake up call for global leaders to intensify cooperation on epidemic preparedness and provide necessary financing for international collective action. In India poor economic status lead to enhanced infectious cases. First, less numbers of hospitals specially in remote states and then no ventilators followed by poor hygiene resulted in huge loss . This revealed the economic condition of the country which needs to be developed as soon as possible otherwise in near future more such devastating biological disasters will left the whole world without a single person.
During the outbreak lockdown was imposed , restaurants , bars, food labs, markets were closed . Economy generation was zero. Tourism industries were decimated which generates almost half of the economy of a nation. As the cases started to increase globally, mainly through US, Italy, Spain, Germany , France etc. the world financial and oil markets significantly declined. With the inability to cope with the threats of COVID-19 and being unable to stop the growing cases, the global leaders seemed to be defeated . Being susceptible to such pandemics we should always be prepared physically as well as economically to face such disasters. In the near future many more cases are likely to happen and preparation of vaccines should be the priority for the government, no doubt how much it costs. As the spread of the virus is likely to continue disrupting economic activity and impacting negatively manufacturing and services industries ,it is expected that financial markets will continue to be volatile The question is whether these crisis will have a lasting structural impact on global economy or short term financial impact. In both the cases it is evident that these diseases have a potential to inflict severe economic and financial costs on national, regional or global economy.
Global growth is expected to accelerate to 5.6% this year, largely on the strength in major economies such as the United States and China. And while growth for almost every region of the world has been revised upward for 2021, many continue to grapple with COVID-19 and what is likely to be its long shadow. Despite this year's pickup, the level of global GDP in 2021 is expected to be 3.2% below pre-pandemic projections, and per capita GDP among many emerging market and developing economies is anticipated to remain below pre-COVID-19 peaks for an extended period. As the pandemic continues to flare, it will shape the path of global economic activity.
The United States and China are each expected to contribute about one quarter of global growth in 2021. The U.S. economy has been bolstered by massive fiscal support, vaccination is expected to become widespread by mid-2021, and growth is expected to reach 6.8% this year, the fastest pace since 1984. China's economy - which did not contract last year - is expected to grow a solid 8.5% and moderate as the country's focus shifts to reducing financial stability risks.
CONCLUSION
A recovery in global trade after the recession last year offers an opportunity for emerging market and developing economies to bolster economic growth. Trade costs are on average one-half higher among emerging market and developing economies than advanced economies and lowering them could boost trade and stimulate investment and growth. The impact of the shock is likely to be long-lasting. While the global economy is expected to recover this year, the level of GDP at the end of 2021 in both advanced and emerging market and developing economies (EMDE) is projected to remain below the pre-virus baseline. As with the immediate impact, the magnitude of the medium-term cost also varies significantly across countries, with EMDE suffering the greatest loss. The IMF (2021) projects that in 2024 the World GDP will be 3 percent (6 percent for low-income countries (LICs)) below the no-COVID scenario. Along the same lines, Djiofack et al. (2020) estimate that African GDP would be permanently 1 percent to 4 percent lower than in the pre-COVID outlook, depending on the duration of the crisis. It will take global coordination to end the pandemic through widespread vaccination and careful macroeconomic stewardship to avoid crises until we get there. |
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