As coronavirus continues spreading all over the world, the countries are trying their best to stop this outbreak through the necessary measures. People along with industries have been put under a strict lockdown, bringing an abrupt halt to the lives of the people and the economy. The economic trends due to coronavirus are shocking and it is believed that if these trends continue, there is a definite possibility of a global recession. From the huge travel industry to small shops on the roads, every small-scale, and large-scale industry has stopped their daily production, selling and business adhering to the lockdown rules.
Here are some of the changes in the economic trends due to Coronavirus
Global shares take a hit
Ever since the outbreak, there have been big shifts in stock markets. All the shares and investments of every country are falling at an alarming rate. In response, many of the banks have slashed interest rates in order to encourage spending to boost the economy.
Travel Industry is the most damaged
Since many of the countries banned international and national traveling, the travel industry is facing a lot of loss. With airlines cutting flights and tourists canceling business trips and holidays, it seems hard to recover from the crisis.
Supermarkets are flourishing
Since the public all around the world is stockpiling on groceries, goods such as toilet paper, sanitizers, rice, orange juice, packaged food items, there has been a tremendously huge growth in the supermarkets and online food delivery services.
Growth has become stagnant
According to the Organization for Economic Cooperation and Development (OECD) the world economy could grow at its slowest pace due to the coronavirus outbreak. The GDP of various countries has really deep since January-March and it will further deteriorate in April-June.
Disruptions in International trade
Some reports note that the negative effects of prolonged economic constraints in developed economies will soon spill over across trade and investment channels into developing countries. A rapid fall in consumer spending in the European Union and the US would limit luxury products imported from developed countries.
According to The UN Department of Economic and Social Affairs (DESA), the COVID-19 pandemic is disrupting global supply chains and international trade. The world’s economy will see its worst condition if governments fail to provide income support and help boost consumer spending. The service sector is hit hard by lockdowns in Europe and North America, especially industries that require physical interactions such as retail, leisure and hospitality, entertainment and transport services. Lacking the political, fiscal and operational ability to respond to this crisis, the consequences of a combined health pandemic and global recession would be disastrous for many developing countries and impede their progress towards the Sustainable Development Goals.