Every country on the face of the earth is competing economically to prove and claim its strength on the global level. Now there hasn’t been one specific cause affecting the global economy until the outbreak of COVID-19.
The outbreak has already brought about great human suffering and considerable disruption in the economy. As predicted by experts, the economy contracted by ½ % in 2019, but as its increasingly spreading, global GDP has dropped by 2.4% by the end of 2020. In 2020 fiscal support reached approximately $16 trillion, which is 15% of the global GDP.
Benjamin Gordon Palm Beach suggests that the impact of COVID-19 on the global economy is going to be long-lasting
As of the year 2021, the global economy is estimated to recover. But as of now, experts state that in both the emerging, developing, and advanced market, it is to remain below what was a pre-pandemic situation. As the immediate impact, the mid-term cost magnitude is also varying cross-countries.
Foreign Fundings
As the economy globally is suffering at high rates, the fiscal space, which is the support capacity to fund a firm and household dependent on internal finance markets, due to COVID-19 restriction, has scarred deeply on foreign funding policies.
State capacity
State capacity is an efficient and fast way of implementing the policies to support firms and households, which requires state capacity and well-developed transfer infrastructure and tax. It has also suffered a lot due to the pandemic.
Labor Market
The labor market is the worst under the global economy as it cannot be done digitally anyway. Many workers have faced huge friction in getting a remote working job, thus sinking them more into poverty.
Working Class
The virus has touched the core of the global economy: the working class, who are bound to look for other ways of making money due to distancing and travel restrictions in countries, so the impact is long-lasting.
The economic prospects remain subdued and highly uncertain because of the virus-
Benjamin Gordon Palm Beach states that because of the quarantine, strict and widespread restrictions, there is low labor mobility, resulting in unplanned delays in different factories, with sharp cutbacks in service sectors.
The state of the stock market
The share market is one of the backbones of the global economy, but due to COVID-19, it has seen the biggest rescissions of all time. People were under constant fear because the market went down by 38%, which is the loss of 27.31% of the entire stock market from the start of this year.
The current global pandemic has shaken all the sectors which are under the global economy. Taking from –
- Primary, which includes environmental jobs like agriculture (red-collar work)
- Secondaries like construction processing and manufacturing jobs (blue-collar work)
- Tertiary which includes exchange and production services (white-collar work)
- Quaternary this includes classified and knowledge sector
- Quinary this focus on the interpretation, re-arrangement, and creation. Affecting every sector, which in turn has impacted people from all walks of life.
The precautionary measures are impactful and showing results, but the effects of the virus persist. Countries around the globe are attempting to perform their best in eliminating the virus from their country by getting everyone fully vaccinated and everyone following the rules and restrictions to bring their economy and the global economy as pre-COVID-19 times.
