Tuesday April 7, 2020
Home Business COVID-19: Cat...

COVID-19: Catalyst to the Global Economic Crisis

Is global recession likely in 2020? Find it out here

0
//
COVID-19 economy
The COVID-19 outbreak is a catalyst to the economic crisis the world is facing right now. Pixabay

BY ACHINT ARORA

A recession is a macroeconomic term that refers to a significant decline in general economic activity in a designated region. However, the National Bureau of Economic Research (NBER), defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. As restaurants, airlines, shops, factories are all shut down around the globe, we could be staring at a global recession very soon.

The COVID-19 outbreak is a catalyst to the economic crisis the world is facing right now. It has not only disrupted the demand side but also the supply chains by first attacking unprepared China the Factory to the world and then spreading to other parts of the World.

COVID-19 economy
The US economy has been rather postponing recession since its trade war with China but the COVID-19 Virus has preponed the slowdown which could have otherwise occurred in 2-3 quarters of 2020-21. Pixabay

The virus hit the world economy at a time when it was already showing signs of weakness — deficits and debt at all time high, especially in the US. We cannot borrow our way into growth by using more of debt. The more we grow, the more we owe. The US economy has been rather postponing recession since its trade war with China but the COVID-19 Virus has preponed the slowdown which could have otherwise occurred in 2-3 quarters of 2020-21.

Economies are at a halt, businesses are shut, global travel has slowed drastically — all this could lead to huge layoffs in the times to come. Many businesses, especially small businesses, are facing a cash flow crunch, sales are not happening but they still have payroll, suppliers payments, taxes to be paid. This is the time the government should intervene and make sure they get through the period. China Manufacturing Activity is at an all-time low, pollution levels across China tells you the Chinese economy has come to a halt. International trade flights have been cancelled, air shipments has taken a hit, international shipping is at a halt. We have never faced anything like this.

COVID-19 economy
COVID-19 has a negative impact on the world GDP. Pixabay

It will take a lot of time for people to come out of this and join back work due to fear post the isolation period. Conferences, events, sporting events — all these make a huge impact. The businesses are going to have massive layoffs especially in travel and tourism. The economic and financial system impacts are gigantic and are accumulating. The central banks all over the world are doing the best they can by bringing down interest rates to an all-time low. But, low interest rates cannot really help combat a virus or encourage frightened people to go the theatres.

Also Read- Discover the All-New Realme 6 Pro

The Federal Reserve has already taken a step to give payroll tax holiday to US employees. But, if you are unemployed, you don’t benefit. No Income, No Tax. Priority should be to give direct cash in the hands of US citizens. The only solution to contain the virus is social distancing and lockdowns. This is different than the 2008 crisis since it was more or less limited to the housing sector, the other sectors of society were functioning smoothly. People were going out to restaurants, theatres, events, etc. This time, it’s different and the consequences will be different. These are the Mmst uncertain times. Yes, COVID-19, is a real disaster, and attempting to contain it will be unbelievably costly. It didn’t have to be this way. (IANS)

Next Story

The Effects of Social Distancing and Isolation

How Social Distancing Can Impact Your Mental Health

0
social distancing
Mental health of many people, especially extroverts has been affected due to social distancing. Pixabay

By Dora Mekouar

Social distancing and isolation can be hard, as New York Gov. Andrew Cuomo recently pointed out during a daily briefing on the status of COVID-19 in his state.

“Don’t underestimate the personal trauma, and don’t underestimate the pain of isolation. It is real,” Cuomo said. “This is not the human condition — not to be comforted, not to be close, to be afraid and you can’t hug someone. … This is all unnatural and disorienting.”  

social distancing
Playground equipment is wrapped in crime scene tape to prevent its use as part of the effort to slow the spread of the coronavirus. VOA

Experts already know that years of loneliness or feelings of isolation can lead to anxiety, depression and dementia in adults. A weakened immune system response, higher rates of obesity, high blood pressure, heart disease and a shorter life span can also result.

Please follow NewsGram on Instagram to get updates on the latest news

Children who have fewer friends or are bullied or isolated at school tend to have higher rates of anxiety, depression and some developmental delays.

But when it comes to a global pandemic like COVID-19, there is no documentation to which medical experts can refer.

social distancing
A man walks past a sign advistng social distancing at the Ferry Plaza Farmers Market in San Francisco. VOA

“The studies that we have are more about forced isolation and no support,” said Elena Mikalsen, chief of the Psychology Section at Children’s Hospital of San Antonio. “The situation we’re in now, there’s a lot of social support … and social support is one of the big predictors of good health and mental health outcomes.” 

She adds that it is helpful that the entire world is basically in the same situation, a commonality that is leading to the rapid development of coping strategies from multiple sources, including friends, schools and businesses.

Please follow NewsGram on Twitter to get updates on the latest news

During this period, Mikalsen is advising her patients to stay connected with people,  exercise regularly, and keep to a schedule so that everybody in the household has some sort of purpose in their day. Waiting around and worrying about getting sick can lead to increased anxiety.

A key factor driving people’s decisions on whether to isolate could come down to personality.

social distancing
A Pittsburgh Public Works employee removes a basketball rim from a court on the Northside of Pittsburgh, Monday, March 30, 2020. The rims were removed because people were not following social distancing rules while using the courts over the weekend. VOA

“Extroverts have this strong need to always be around other people. … The idea of being in a quiet place with no entertainment is extremely anxiety provoking,”  Mikalsen said. 

“Versus, you know, an introvert is perfectly happy in a tiny little room with nothing. You can lock up an introvert in a New York City apartment and have them not come out for two months and they’ll be perfectly happy.”

Also Read- Using Oats to Achieve Perfect Skin Goals

Meanwhile, Cuomo told reporters that he is focusing on the positives in the current situation, like having his grown daughter, Cara, 25, working with him during the crisis.

“They’ll come for the holidays. They’ll come when I give them heavy guilt,” he said of his three grown daughters. “But I’m now going to be with Cara, literally, for a few months. What a beautiful gift that is, right? I would have never had that chance, and that is precious. … This crazy situation, as crazy as it is, gave me this beautiful gift.”  (VOA)