Reduced income, increase in unemployment, and a turbulent financial market has characterized the global economic scenario due to the COVID-19 pandemic. In 2020, on March 11th, the World Health Organization declared COVID-19 as a pandemic, recording more than 3 million Covid cases and 207,973 deaths from as many as 213 nations and territories.
A few of the attributable factors that can be held responsible for the economic slowdown across the globe include a drop in productivity, loss of life, disruption in trade and commercial activities, and closing of many business entities. The adverse effect the pandemic has had most prominently is over the travel, tourism, and hospitality industry. The two sectors that were affected the most contributed considerably to the economic growth of the countries in the form of GDP.
Global financial decisions taken by governments may prove to be helpful, says Benjamin Gordon Palm Beach
Aside from the stimulus packages that governments intend to roll out, it is equally important for vaccinations to be distributed equally. Every government’s aim must be to vaccinate their population by the end of 2021 or the beginning of 2022 to curb the spread of the deadly virus.
It was also observed that as the number of Covid cases started to rise, especially in United States, France, Iran, Spain, and Germany, to name just a few, financial markets and oil markets in particular declined. Most of the stock markets indices in the US and Europe lost their values, and as of April 24th, 2020, it was seen that the oil process had subsided by at least 65%.
Two major factors, namely, price movements and volatility prevailing in the markets, are valid indicators about how the markets are performing. There was always a negative relationship between the increase in the number of cases and the value of the stock indices.
Aside from the impact on the travel and tourism industry due to cancellation of flights and restrictions imposed, there was a decline in oil prices, decrease in productivity, closure of businesses, increase in the rate of unemployment, and the labor market was characterized by shocks due to migration of workers.
An important aspect that governments must keep in mind is that there has to be an equilibrium between demand and supply of co-operation among all countries across the globe. This was also agreed upon by Benjamin Gordon Palm Beach.
The pandemic is on a spree of disrupting all kinds of economic activities, thereby adversely impacting service as well as manufacturing units across the globe. This holds true for developed nations in particular. As such, the markets have remained volatile throughout.
However, what experts are still not being able to predict is whether the effect of the pandemic on the global economy will be short-lived or will linger on for years to come.
Interestingly, all nations are interconnected with each other in some way or the other. It is either through tourism, logistics, and supply chain, or migration and talent management or acquiring. As such, it becomes even more important for all nations to work in tandem to do away with the lasting ill-effects of the pandemic on every economy.