Everyone in the world is either struggling or trying best to avoid being affected from the Covid-19 pandemic. Amidst all this, whole world is on lockdown to stop the spread of corona virus as this virus transmits through air and human to human contact.
On one hand where world is fighting this pandemic, economist are worried sick thinking about the loss which the international economy is facing and will face in the near future.
Recent UN report says, “The world economy will go into recession due to the corona virus pandemic, with the exception of India and China. Two-thirds of the world living in developing countries are faced with unprecedented economic damage, United Nations Conference on Trade and Development said in its new analysis, calling for a $2.5 trillion rescue package for these nations.”
According to the UNCTAD analysis, commodity-rich exporting countries will face a $2-$3 trillion drop in investments from overseas in the next two years. Advanced economies and China have put together massive government packages which, according to the G-20, will extend a $5 trillion lifeline to their economies. "This represents an unprecedented response to an unprecedented crisis, which will attenuate the extent of the shock physically, economically and psychologically," UNCTAD said. While the full details of these stimulus packages are yet to be unpacked, an initial assessment by UNCTAD estimates that they will translate into $1-2 trillion injection of demand into major G-20 economies and a two percentage point turnaround in global output.
"Even so, the world economy will go into recession this year with a predicted loss of global income in trillions of dollars. This will spell serious trouble for developing countries, with the likely exception of China and the possible exception of India," UNCTAD said.
UNCTAD proposed few steps to mitigate COVID-19 economic fallout:
Whereas World Economic Forum stated that it will take atleast 3 years for countries like USA to recover from this economic fall down due to COVID-19. “If the public health response is stronger and more successful - controlling the spread of the virus in each country within two-to-three months - the outlook could be more positive, with economic recovery by the third quarter of 2020 for the US, the fourth quarter of 2020 for China and the first quarter of 2021 for the Eurozone.”
Other countries are also feeling the economic impact of COVID-19. For example, global online bookings for seated diners have declined by 100% year-over-year. In Canada, nearly one million people have applied for unemployment benefits.
Hard-hit countries such as Italy and Spain, which already suffer from high unemployment, are also expecting to see economic blows. However, it’s too soon to gauge the extent of the damage.
Given the near-shutdown of many economies, the IMF is forecasting a global recession in 2020. Separately, the UN estimates COVID-19 could cause up to a $2 trillion shortfall in global income.
