The global outbreak of coronavirus has engulfed the world economy, with several economic activities reaching the verge of a complete breakdown.
The world, slowly but surely, is slipping into a global recession and estimate shows things will only worsen in the times to come.
Several cities and nations have declared lockdown and global flights have also been cancelled, which will have a direct impact on the business across the world.
From a globally interconnected village until a couple of months back, the world today has turned into globally disconnected isolated blocks.
Even though we are in touch with each other via the internet and social media, but due to the lack in inter-personal connection and public socialising, the business has suffered and is going to do so in the recent future.
Tourism is one of the biggest industries in the world and with lockdowns declared and flights cancelled, the tourism sector has been the worst affected.
The entertainment industry (read the film industry) has stopped several projects amid the outbreak and this has lead to the loss of the colossal amount of money.
From where is this money going to come back? There seems to be no proper answer as of now.
Countries are now in the look-out for every possible option to revive the dying economy.
“Even if we produce, where are we going to sell it” is one of the most daunting questions that has been haunting the world right now.
The outbreak of coronavirus was first reported in China and since then the country’s production has reduced and this has directly affected other countries that do business with them.
“Concerns over a possible hard landing in China is growing as combined data for January and February shows industrial production, retail sales and asset investments all declined by double digits – 13.5 per cent, 20.5 per cent and 24.5 per cent respectively,” The Korea Times reported.
“These are China’s first declines on record, and have triggered zero growth outlooks for the world’s second-largest economy for the first quarter of this year,” it further reported.
This is just the beginning of the economic slowdown, as with coronavirus outbreak spreading deeper into the US, UK and the rest of Europe, the magnitude of slowdown will grow bigger and larger and we will witness its damaging ripple effects in the world economy.
Economic experts are of the view that with the decline in prices of oil in the global market could lead to widespread bankruptcies, leading to tens and thousands of becoming jobless.
To mitigate, to fight a pandemic like this requires a lot of investment in the health sector and the countries are ready to invest billions as well.
But, with limited production and business, from where is the money come from?
Highlighting a report of economic experts, The Korea Times reported, “Analysts say the world’s debt situation is much worse now than it was at the time of the economic crisis in 2008, with $19 trillion piled up in risky corporate debt.”
Loans from the World Bank or any other international economic forum will further plunge the countries into debts and the magnitude of it can only be imagined.
Bankruptcy due to coronavirus is a real threat and the world needs to stand up and think of ways to combat the crisis situation.
Instead of leaders making tall claims like “coronavirus will not affect the economy” should open their eyes and see what is going on around the world.
They should see how badly the pandemic has hit the world Sensex.
We are in the middle of such a crisis where we need to make an assessment of the future in a holistic way.
Apart from tackling the spread of virus we, as world denizens, must also work to find ways of strengthening our dying economy.
The coronavirus-triggered circumstances will help us to stay prepared for any possible shocks like this in the future.