The novel Coronavirus (COVID-19) has dominated headlines since its outbreak in Wuhan, China. At first, the virus was just a primary concern for the medical team. Since they had little know how about how the virus spreads, the incubation period, and how severe the virus is. This matter got out of hand when it started spreading rapidly. Before the medical community could find the best possible ways to contain it. A pandemic was in effect.
It’s at this time; pandemic preparedness was in it’s early stages. This new pandemic started spreading to all corners of the world. Affecting people’s way of life as well as their economic activities. To date, the Coronavirus has halted the global economy. With most countries recording the highest cases of unemployment due to the shutdown of industries and many other enterprises.
So, let’s look at how the Coronavirus has affected the economy.
The Pandemic and Unemployment
The pandemic has brought the world to a standstill. As many countries have adopted lockdown procedures as a measure to tame the spread of this deadly disease. This means most businesses have put their operations on hold. Sending their employees for a compulsory leave and others terminating workers contracts. Since, there is no certainty on when the normalcy will resume.
Businesses that are still in operation are forced to lay off their employees’ to comply with government directives. Such as social distancing so as to contain the spread of COVID-19.
Self-quarantine has forced people to stay at home, significantly reducing their outdoor activities. Which involves shopping in malls and supermarkets, among others. This leads to a decline in sales. In order to cope with such a situation, businesses are left with no choice. Other than to lay off their workers resulting in record breaking unemployment.
Since most countries have embraced total lock down to mitigate the spread of the new world pandemic. Only a few activities are taking place as far as international trade is concerned. Flight closure has led to a decline in the global supply chain. Leading to a shortage of commodities in some countries, primarily those that rely on imports.
For instance, the demand for oil has declined since the outbreak of the virus. With the leading manufacturing centers like the US and China, causing the oil prices to drop.
Financial and Commodity Markets
As the virus continues to ruin major economies across the globe. Most investors, especially those in the equities market, have turned to net sellers. Wiping out any gains that the primary indices have made over the years.
Investors are now turning to more secure haven assets like gold, leading to a rise in prices. The decline in oil prices discussed earlier has ruined the stock markets. With most investors rushing to dispose of their stocks in the energy sector.
Measures to Improve Economy Amidst Covid-19 Pandemic
Most of the countries are slowly lifting the lockdown restrictions. Allowing people to get back to work while adhering to the government directives. Such a move is aimed at reviving economies that have stalled for months.
Governments have opted to cut the cost of production by subsidizing energy . To facilitate the running of industries during these unprecedented times. This has prompted most industries to resume operation since they are less likely to incur losses. This is likely not the last pandemic that will develop. But, hopefully this is the last pandemic that will affect us the way the novel Coronavirus has.