There has been a drastic change in the world economy in the last three months due to a rare disaster that has taken the lives of thousands of people. To save lives countries all over the world have taken up measures of self-quarantine putting the countries under a state of lockdown where the business has been closed down along with schools, colleges, universities, to the extent of government offices. As a result the world is going through a global recession.
In this article today we are going to discuss the causes and effects of recession due to the global lockdown.
The sudden shut down of businesses in an attempt to abide by the social distancing norms has taken a toll on the global market. There has been a considerable fall in the global GDP.
Effects Of The Recession On The Global Market Due To Covid-19
This crisis has led to the following effects due to the COVID-19 Pandemic attack.
- Countries that were dependent on travel and tourism and entertainment and hospitality for their growth are going through great losses. People have been instructed to maintain social distancing and avoid going to tourist spots. As a result all the tourist spots have been closed for an indefinite period until the spread of the virus can be controlled.
- There have been unprecedented reversals in capital flows .A large portion of the government fund is going into equipping countries to deal with the virus by getting extra test kits and making the space in the hospitals. Mobile health centers have been made in countries where the rate of infected patients is more to restrain the common people from exposing themselves to the risk of getting infected. As a result the financial budget has been affected severely.
- The main reason for this recession is that countries were not prepared to deal with such a crisis. Some economies were already going through high debts. After the great depression for the first time both developing economies along with emerging markets are going through a recession. The worst part about this recession is that the entire nation is under a state of uncertainty. The final conditions may worsen if the measure taken by the countries of social distancing and lockdown persists.
- Effects of Economic Recession may cause a considerable decrease in the global GDP to up to 8% in the next year as suggested by the survey reports from global health organizations.
Points Of Action
The lockdown measures taken by the government allows the medical systems to cope with the spread of the virus. The following measures can slow down the effects of this global recession on the world economy leading to lesser damages.
- The countries should make sure they spend generously to equip the healthcare systems.
- They should put up more medical camps and mobile testing centers to test people to avoid the spread of the virus. This will lessen the burden on medical systems.
- Countries should make sure they refrain from trade restrictions on the supply of medical equipment and medicines.
- The research centers are trying their best to invent a vaccine for the disease. The whole nation should get together and put in their combined efforts to ensure that as and when the therapies and vaccines are developed they should be evenly distributed among rich and poor nations.
- Since the economy has shut down to stop the spread of the virus policymakers should make sure that the basic needs of the commoners are met and the countries are in a position to pick up a business once this phase is over. Some policymakers have already started taking up measures like credit guarantees, loan forbearance and liquidity facilities to ensure that there are funds available for business houses after this crisis passes by.
- The government has ensured insurance for expanded unemployment, tax relief, and enhanced benefits for companies. This kind of support should be continuously given to industries to lessen the impact of the recession.
- The policymakers should also focus on recovery. With the arrival of containment measures the policies should swiftly move towards supporting demand and repair the balance sheets.
- There is a need to reconstruct debts and repayments during the recovery phase.
- Multinational companies play a vital role in the global recovery. There should be a collaborative effort to ensure that the world overcomes this recession and does not de-globalize and there is no further loss of productivity.
- Measures must also be taken to support the vulnerable countries by implementing rapid disbursing, debt service relief, and emergency financing policies.
- The campus learning has shifted to online learning. There are instant essay help services which are helping academic students to cope with the changing scenario.
Thus it can be said that even though the world is going through a global recession due to the COVID-19 and there has been a massive shift in the lifestyle of people with a greater impact on the world economy measures are being taken to withstand this crisis. The nation has joined hands to ensure that we get over this crisis and there is minimum damaged caused. There has also been a massive change in the education sector due to this recession because on-campus learning has shifted to online learning overnight. But, online essay writer have been playing a vital role to cope with the changing scenario. They not only guide students in their assignments but are also ensuring students get the much needed moral support to surpass this crisis.
SourceEssay has gained a lot of popularity by giving online economics assignment help to students to help them understand the impact of the global recession on countries and also assist them in their assignments.