The global economy might see a 1% shrink in 2020 due to the current coronavirus pandemic. It might further get worse if the situation doesn’t get better and economic activities don’t start, according to the UN Department of Economic and Social Affairs (UN-DESA). The department also said that lakhs of workers have lost and many more are at the risk of losing their jobs in a number of countries including India.
What governments around the world need to do is intervene in their countries’ crisis and push money to the market as soon as the situation gets better.
In Europe and North America, the service sector has been hit quite hard, mainly retail trade, hospitality businesses, and transportation businesses. Since there is a shortage of revenue in almost all sectors, it will not be wrong to say that unemployment will reach its peak. The supply and demand disruption is quite likely to affect the economy in a more severe way. However, its impact will largely depend on how long the restrictions go on.
The UN study also focuses on the fact that developing economies will be affected more if there exist prolonged economic restrictions in developed countries, since the trade channel will completely disturb. Since there will be a sharp decline in consumer spending in the West, particularly in Europe and the US, high economic risk awaits the developing world. Countries that rely on tourism and exports are among the most hit by Corona lockdown.
Talking about the global tally of COVID-19, there are more than 3.35 million confirmed cases of the deadly disease, while more than 240,000 people losing their lives. India’s tally reaches to 37,000 in confirmed cases and 1200 deaths. As the government of The country has extended the lockdown period to 15 more days, it looks to be the economy will have a far greater impact in the days to come.