The economy is at a standstill with the current pandemic that is the Novel Coronavirus or COVID-19. Let’s take a look at how this affects our global economy so far.
The stock markets are shifting, and shares are being sold and bought, which affects the value of pensions and even savings accounts.
Investors are starting to fear the shifts in the stock market, as this may hamper any type of economic growth. Moreover, the majority of investors also agree that the government’s mitigating actions may not be enough to help the economy.
As an action taken by banks, they have slashed interests in order to encourage more borrowers and increase the spending capacity of the population. The step taken had helped a part of the global market to recover in March, specifically the US, when they passed the $2 trillion bill to help workers.
People are Looking for Work
The unemployment rate is at it’s highest peak especially in the United States. People are filing for unemployment and this signals the end of one of the world’s largest economies.
In the United Kingdom, one million individuals had applied for unemployment benefits. Even though people are unemployed, they are still encouraged to get credit cards in order to limit the spread of the virus through contact with people and money.
The Current State of Oil
The lockdown all across the globe had resulted in a decrease in oil demands. Currently, prices of crude oil are at its lowest. To get a clearer view of how low the oil price is, the oil in Europe is now priced at below $20. The last time that Europe saw and experienced this price dip was 18 years ago.
Even with low prices, the lack of economic activities even in local communities had adversely affected the production of oil. Moreover, even though the product had stopped, we still have an abundance of crude oil more than we need.
Travel and Leisure Hit the Hardest
The lockdown had put us in a standstill, even traveling by land is becoming difficult nowadays. Governments had established strict travel restrictions even within local communities.
Airline industries are cutting flights because people are canceling business trips and holidays abroad. Borders are being closed for months-long, wherein the EU banned international travel for 30 days, and the US had banned European travelers from entering the US.
Recession is at the Corner
Due to the downfall of economies, we are at risk of recession. It must be noted that jobs and new jobs help the economy grow.
If people aren’t working, then people aren’t buying goods and services. The gross domestic product of a country is an essential factor in order to see economic growth. Therefore, the decline of production and services and the decline of its consumption for three years or one year can signal economic recession.
Even though the pandemic will fade in 2020, we will not expect economic growth after a year.
The Visible Effects of Lockdown
Factories and other major industrial products are brought to a halt. Factories in China are slowing down along with other significant production establishments.
The European Space Agency had recorded a fall in pollution across the European skies. Other cities are also seeing clearer skies, including the industrial hubs and cities in India.
People are Turning to Technology
Governments and the private sectors are turning into technology in order to stay afloat during this lockdown. People are using technology more to communicate. Companies are adapting to the new work from home set up. Not only that, streaming platforms like Netflix are also experiencing growth and Amazon had hit new heights as it’s price share increased.
Businesses and brands are turning to technology to bring their business to their market. People are avoiding showrooms, and that’s why brands are selling online, even Tesla.