Economy due to Coronavirus pandemic
How deep the recession will be and what economies due to Coronavirus pandemic will look like?
All assumptions and statistics crashed as Coronavirus spread started last year. Many factors come into play when we talk about the economy.
The beginning was a big hit to the economic pathway. Yes! the start of the pandemic when many weren’t even aware of term Coronavirus. Already it had infected economy.
Let’s go to the source first. China, having an estimated GDP of 13.6 trillion per year was through the trauma of handling the pandemic. China has a large role in supply and demand. As factories, businesses and borders closed the supply chain was hit which directly impacted demand.
During the period of December-February, the production of China dropped by 25%. Not only that, China is a massive buyer of goods that impacted the exports of numerous counties around the world. China was heading for -1% GDP projection this being the scenario.
As China struggles to get out of the health crises they aim to be back into their biggest market-Europe. Which is later on hit with the pandemic. This impacted the World trade overall.
As the quantity of goods exported from China being massive could not be overtaken by any other competing country. This slowdown in trade came by a surprise. The US is one of the biggest competitors and as notified by President Donald Trump to be ‘In a very strong position’ could not take much of an advantage. Despite all the trade hype prior.
The US had a stable economy until the Coronavirus hit. As per the National Association for Business Economics (NABE); NABE Outlook Survey panelists anticipated that inflation-adjusted GDP growth will slow from 2.9% in 2018 to 2.3% in 2019 and 1.8% in 2020.
But now the economy due to Coronavirus has got all economists worried. The world has seen crashing markets, a decrease in oil prices, medical aid requirements and much more.
Stock indexes all over the world had devastating sessions several times in the near past.
In the US, Dow lost over 3,000 points in just one day. Due to coronavirus pandemic, in just a span of one week 3.3 million Americans apply for unemployment, 5 times the record. And a week later 6.6 million apply for unemployment.
Closing of borders has caused a big decrease in the production and unemployment. Although President Trump has mentioned a ‘big bounce’ after the pandemic, economists around the world predict a big recession.
The federal government had come up with a $2.2 trillion relief package, that’s above 10% it’s GDP. The peak of the pandemic in many countries is over, experts say. With more than 1 million cases the US government has loosened its measures on the people.
Although many counties are getting back to normal. But the pandemic isn’t over yet and is showing chances of a second wave. But governments are forces to open as the lockdowns are taking the tolls on the economy.
Many businesses were affected during this pandemic and the economic losses to the countries cannot be imagined.
On the contrary, China is back on track to normal (maybe). This kind of recession on a graph is known as a V-shaped recession due to the fall and quickly bound back to normal. Most of the counties would like this and have a V-shaped recession. U-shaped recession being a longer one.
Types of recessions explained
The recession is dependent on the containment of the coronavirus or also known as Covid-19 pandemic. We have an exclusive study that relates the number of cases to the severity of the recession.
If we are unable to contain the cases of coronavirus patients our healthcare wouldn’t be able to manage such a large number of patients and there would be a spike in death counts.
To flatten the curve of patients or cases of coronavirus, governments need to take measures of self-containment. Although this will affect our daily work life, this needs to be done to not put load on our healthcare capacity.