‘Pandemic’, what this word actually means? A pandemic is an outbreak of a disease that occurs over a geographic area and affects high proportion of the population. The best-known pandemic is the ‘black death’ a plague that spread across Asia and Europe in the middle of the 14th century. Beside of this there is Spanish flu of 1918 and H1N1 of 2009. Pandemics can cause economic damage through multiple channels, including short – term fiscal shocks and long term negative shocks to economic growth.
The economic impact for the corona virus is yet not known cause we do not know the science behind it. China is the hub of the virus .If we think only china will suffer, and then the answer is ‘No’. The commodity export and import in the countries will also suffer. Whatever is the behaviour of the virus it will have a long-term effect. It may have a dependency in the value chain of china. The corona virus might be an element in the process of deglobulisation. After a long decade we are going to experience deglobulisation, the long-term growth of the world will decrease and this is something people have to be very careful.
Not for the mortality rate, but for the economic measures taken by government to fight for the pandemic situation. OECD has calculated a decline in the GDP, which is 2.5-2.6% in the world GDP. Many people think that the epidemic centre or the womb of the pandemic will be on a net loss. However, it’s not true. The export – import market, the international businesses will suffer a lot. Somehow, everything is connected to each- other. There may be a v shaped graph in the economy statistic of China. As China market has already started production works and the pandemic hub may suffer from 4-5 % GDP decline in the economy. A pandemic can lead to global recession. The real problem can’t be fixed. There will be a long-term effect and any pandemic may lead to evolution change. Since 1970s, we have seen to globalization. Nevertheless, after a long period of gap we may experience to deglobulisation. According to OECD, the corona virus pandemic is the third great shock of the 21stcentury, and the biggest one. The shock is – economic, financial and social. According to OECD secretary general, the lockdown will directly affect sectors amounting to up to one third of GDP in the major economies. Each month there will be a loss of 2 percentage points in annual GDP growth. Many economies will fall into recession. The tourism sector alone faces an output decrease as high as a 70%. This is unavoidable. He urged the G20 leaders to act immediately, to recapitalise heath, to mobilise all macro-economic levers; monetary, fiscal and structural policies, to lift existing trade restrictions, to provide support to vulnerable developing and low-income countries. GDP growth will ultimately depend on many factors, including the magnitude and duration of national shutdowns, the extent of reduced demand of goods and services in other parts of the economy, and the speed at which significant fiscal and monetary support takes effect. Many countries in which tourism is relatively important will be affected more severely by shutdowns and limitations on travel. At the other extreme, countries with relatively sizeable agricultural and mining sectors, including oil production, may experience smaller initial effects from containment measures, although output will subsequently hit by reduced global commodity demand. The OECD has committed its expertise to support governments in developing effective policies in any sector necessary to slow the pandemic’s spread and blunt its economic and societal effects from health to taxes, labours to employment to SMEs, education, science and technology, trade and investment and more
People are worried about the global economic condition for the pandemic. No matter what globally we might be in the front line to face a recession. If the virus stays for most of the year then it is almost a nightmare. Covid19 may lead to a market crisis. 50 years ago, we were not that much developed. In 50 years and after the Spanish flu we have sophisticated our medical emergencies. Still the world could experience a great threatening deep recessions that will push households and companies to the brink. The stock market hit by the current pandemic. Crude oil prices have crushed. To compound the global economic uncertainty, an ill-timed global crude oil war has begun. The demand by OPEC to further restrict production from April was rejected by Russia, resulting in the scrapping of existing restrictions.
Healthcare can get benefit. All the online companies, specially non retail stores. People will try to maintain social distancing and the online services might get benefit. One thing people will try to avoid is social gathering, hopping on markets, exotic dishes and tourism. So local exotic food markets, restaurants, shopping complexes, fancy industries, cinema halls, film industries, tourism, building and construction works, farming (in all field) and slaughter houses, agriculture and many more areas may suffer from a recession. There might be high demand and less supply, a peak of inflation/ recession can occur. The real victims are the daily wageworkers. Essential commodity prices may hike, as there will be less supply. However, government have ample storage but after a certain time if the pandemic continues, the government will lose space from the storage so there might be inflation on essential commodities. Already the price of the petroleum has raised, the provident fund interest on senior citizen accounts have lowered in India. Many people are fully dependent on interest rates, the government schemes might reduced due to lack of funds for this sudden pandemic shock.
In short, the whole world may experience a global recession an economy crisis.