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Everyone is aware of the current outbreak of COVID-19 in all over the world and the consequent preventive measures taken due to which we all are bound to live in a lockdown.
All universities are closed, exams are cancelled, offices closed, industries came to a halt and strict restrictions are imposed on all over us and the entire world is in a complete shutdown for an unknown period of time. Well, it’s quite evident that no one could have ever imagined that this much bad would happen to us someday, the scenario after the end of this outbreak will certainly be the worst.
All universities are closed, exams are cancelled, offices closed, industries came to a halt and strict restrictions are imposed on all over us and the entire world is in a complete shutdown for an unknown period of time. Well, it’s quite evident that no one could have ever imagined that this much bad would happen to us someday, the scenario after the end of this outbreak will certainly be the worst.
As the coronavirus is stretching its arms over all the nations globally, sparing none at all, it can be deduced that how devastating it affects the world's economy. Rather, better to say that it could bring the world economy to a standstill, consequently leading to the worst-hit to the economy, apparently forcing the world to suffer another global economic recession.
An epidemic that began in the depths of China's Wuhan has killed nearly 180,000 people, routed financial markets and could trigger the worst economic meltdown since the 1930s Great Depression.
"The global recession is almost inevitable."
Taking into account this context, let's discuss how the economic impact of the coronavirus outbreak is being felt across different industries and countries. It finds that the economic costs of the crisis will hit some much harder than others. For example:
1. Service-oriented economies will be particularly negatively affected and have more jobs at risk.
2. Countries like Greece, Mexico, Portugal, and Spain that are more reliant on tourism (more than 15% of GDP) will be more affected by this crisis..
3. Countries more reliant on exports will suffer disproportionally.
Global Shares Take a Back
Big shifts in stock markets, where shares in companies are bought and sold, can affect many investments in pensions or individual savings accounts.
The FTSE (London Stock Exchange), Dow Jones Industrial Average(New York Stock Exchange) and the Nikkei(Tokyo Stock Exchange) have all seen huge falls since the outbreak began on 31 December. The Dow and the FTSE recently saw their biggest one-day declines since 1987.
Investors fear the spread of the coronavirus will destroy economic growth and that government action may not be enough to stop the decline.
Global markets did also recover after the US Senate passed a $2 trillion coronavirus aid bill.
Most Affected Industries
When it comes to the business enterprises, this outbreak has spared none. It means that every industry of different sectors is affected by this outbreak in one way or another.
Henceforth, although there are many industries and firms affected by COVID-19, here we are considering only certain prominent ones which have encountered a sudden and immense change in their business sector during this current global emergency.
Henceforth, although there are many industries and firms affected by COVID-19, here we are considering only certain prominent ones which have encountered a sudden and immense change in their business sector during this current global emergency.
Travel & Tourism
Travel Industry has been one of the most accomplished and well-acquainted ones before this contagious pandemic struck the whole world. Almost all countries imposed certain necessary travel restrictions on foreign flights to prevent the public spread of this deadly disease.
Later on, these restrictions were stretched over the domestic flights too, leaving the flights completely abandoned and the travel industry most adversely shook one.
Moreover, due to the negative impact on the travel business, it has affected the tourism benefits of the affected countries.
Tech
This year, 10 major tech conferences including Google I/O, Mobile World Congress, Facebook F8, SXSW, Electronic Entertainment Expo (E3), etc. have been cancelled due to the coronavirus outbreak.
Coronavirus has a mixed impact on tech companies. With work-in-isolation policy being a mandate for employees, there are companies that make the most of it in terms of profit. For example:
1. Slack Technologies Inc. confirms that due to the global fallout from COVID-19, there is a surge of interest in workplace-collaboration software.2. Zoom, an enterprise video communication solution is one of the most downloaded business apps.
Insurance
The rise of coronavirus cases may end up with the demand for certain insurance types. Depending upon the type of insurance that a company deals in, there are positives and negatives of coronavirus pandemic on the insurance industry.
As the COVID-19 virus continues to dominate the headlines, there is a hike in demand and awareness about insurance plans for health and life coverage. The demand for life and health insurance policies has seen a jump of 35-40% on online insurance platforms in India. On the other hand, travel insurers have experienced a dip in the number of insurances due to travel restrictions. Depending upon the type of insurance that a company deals in, there are positives and negatives of coronavirus pandemic on the insurance industry.
Sports & Entertainment
2.The NBA has suspended its season after a player was tested positive for COVID-19.
Also, Arsenal Football Club has placed its players in self-isolation and postponed the Manchester City game due to coronavirus.
3.IPLT20 has also been suspended.
4.Movie theatres are temporarily locked down in parts of India, amidst the COVID-19 spread.
5.Video streaming companies such as Netflix, Amazon, Disney+ are expected to have a rise in the number of subscribers in the impact of COVID-19.
Retail & Ecommerce
Malls, shopping centres are temporarily shut down to avoid social gathering. Also, due to quarantine, people prefer ordering their favourites or necessities online. Similar is the case with the retail business.
On the contrary, digital commerce businesses are trying to make the most of this situation. Nevertheless, flourishing in such an outbreak is still a challenging job for eCommerce businesses.
Global business leaders are preparing for a drawn-out U-shaped recession due to the impact of coronavirus and many fear their companies won’t survive the pandemic.
Many hope that the economy will bounce back from the coronavirus in a so-called V-shaped recovery. It stands to reason that if the economy crashed because it was intentionally turned off by mandatory shutdowns, then letting people out of their houses will turn it back on.
In all, the biggest issue rising is job losses at global level leaving people unemployed. Rising unemployment will intensify pressure on governments and central banks to speed up reforms.
Gross domestic product is set to decline in almost every country. Some forecasters expect all economies to bounce back simultaneously, but a more likely scenario is that many countries will struggle to recover.
Written by - Meetanshi Gupta
Edited by - Arnav Mehra
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