The COVID 19 pandemic has been one of the grimmest situations faced by mankind in recent times. Though we have been tackling this situation with all our integrity, we are yet to see an end to this. Countries across the globe are affected with more than a million positive cases and massive death counts. Being one of the most contagious viruses, a global lockdown has been undertaken by most of the countries, aiming to reduce social contamination.
Without any vaccine or cure available, lockdown is the only possible solution to stop further spread of the virus. But this solution is brewing up another huge problem: Economic Slowdown. With complete lockdown implemented across the globe, consumption has come to a halt, leading to production shut down for many large firms across sectors. This is leading to a domino effect for the affiliated services, resulting in huge losses in service sectors like aviation, hospitality, transport, and IT and in-turn loss of employment.
Market sentiment has also been very low, with major indices plunging; panic sell-off leading markets to hit lower circuit and trade closure as well.
The huge market selloff reflects a combination of COVID 19 uncertainity and the financial instability due to job recession. This situation has lead us to one of the largest dilemmas with two potential situations:
- Stay under lockdown, leading to massive job losses and economies crashing beyond recovery.
- Allow normal work-life to progress, risking millions to COVID 19 exposure.
Though controversial, Brazilian President Bolsonaro’s decision of not implementing lockdown does reflect the economic threat that is looming in many countries.
- According to the United Nations, we are looking at 25 million potential job losses.
- According to the International Labour Organization (ILO) levels of net unemployment might vary from 5.3 million (low impact) to 24.7 million (high impact)
- This in-turn will impact potential worker income up to USD 3.4 trillion by the end of 2020, leading fall in consumption, culminating in businesses and economies getting hurt.
It’s a cycle that needs to be broken by a huge financial boost provided by the respective nations. But before we reach that point, countries, states and individuals need to survive through the Coronavirus epidemic.
The question remains, how much economic muscle will be left in respective economies to boost up consumption, businesses and create jobs?
Let’s hope everything will be fine soon!!