The ongoing pandemic has truly taken a toll on our lives. We now have to adapt to this completely new way of living and at the same time, keep up with everything that has been going on. But people aren’t the only ones struggling to get through this rough patch. The coronavirus is also throttling the global economy. The situation is much more severe than that of the 2008 economic crisis. And experts are anticipating the worst economic fallout since the Great Depression. Every country, without an exception, is now facing huge financial issues. And not all of them are using the same approach to deal with that. Some prioritize the health of their citizens over anything while others are focusing on sustaining a healthy economy.
The pandemic has shut down most of the school, factories, offices and has also greatly limited the huge contribution the travel industry made to the economic growth of a country. So, how do you even restart an economy that has been destroyed by the coronavirus? This answer is: using baby steps. It is critical that the actions of governments are well thought out as that’s the only thing the duration of the downturn depends on.
European countries in dealing with economic issues
After the first few months of its reign in Asia, coronavirus overtook the biggest countries in Europe including Italy, Spain, and many others. Their first response was putting the needs of their citizens first and ignoring please from their neighbors. Many national health systems in the EU have been stretched to the brink of collapse. It’s not just the health sector experiencing issues. The issues that COVID-19 has imposed on the economy have rubbed off on Forex and stocks as well, with the numbers dropping astronomically.
Closed borders, travel restrictions, and the shutting down of bars and restaurants throughout most of Europe will be more severely felt across its western countries, where tourism accounts for a higher share of the countries’ gross domestic product. Germany’s economy is expected to shrink for the first time in 11 years. In the UK the situation is so bad that the Treasury has pledged to pay 80% of workers’ salaries in order to keep companies from laying them off. France is promising budgetary support worth €45 billion to companies and employees. All of this shows that even the strongest countries have lost their battle against the coronavirus.
What’s going on in the USA
Amidst the USA’s war with the coronavirus and more than 800,000 people infected, the government has to manage a public health emergency while calming financial markets. Armed forces have been deployed to build hospitals and restrict citizen movements to reinforce social distancing. But despite the efforts not much has changed for the good. 17 million Americans have now filed for unemployment since mid-March. To deal with this situation the Trump administration and Congress agreed $2 trillion stimulus package to help America cope with the coronavirus. The bill was signed on Friday.
Other than that, the disruption of global supply chains has left its mark on the USA, leaving it no choice but to stop production. Because of this multiple types of products can no longer be distributed to the people. This, in turn, not only damaged the economy but also deprived the already tortured citizens of many useful products.
The only thing the USA can do now is work with what it already has in hopes of the situation becoming more stable as soon as possible for its economy to flourish once again.
How eastern countries are trying to stop financial problems
Most Asian governments have effectively frozen social and economic activity in all or parts of their countries to contain the outbreak, shutting down nonessential businesses, and ordering residents to stay at home for weeks or months. Some economists believe that the rebound will mirror the recovery of Asia after the SARS outbreak. But, of course, this is only an opinion and the situation has turned out to be much more severe than that of 2003. Researches predict a 0.5% contraction of economies across Asia in the worst-case scenario. This could force roughly 11 million people in the region into poverty. These are the people, whose income depended on sectors particularly vulnerable to the impact of COVID-19.
But luckily Asia has had a much quicker response to economic problems than Europe and it seems as though some of the economies of certain countries, like China, are slowly coming back to life. But this still doesn’t mean that the process won’t be painful. Its economic growth is projected to slow to 2.3% this year.
To help the situation settle as quickly as possible, governments are investing in healthcare capacities and trying to cooperate on an international level.