Since January 2020, the COVID-19 pandemic has taken over the whole globe within just a few months. With more than 3,325,650 cases worldwide, the world economy is now at high risk. While people across the world are locked up in their own homes, businesses of all sizes are suffering massively. Shockingly, the world’s biggest economy, The American Economy is under massive hit after nearly 90,000 deaths in the US! In this situation, all we can do is pray and try to maintain social distancing as far as possible. Now, let’s take a look at the impact of COVID-19 pandemic on the global businesses and economy!
Global Shares Hit Hard: Impact on the Stock Markets
COVID-19 pandemic has cut down one-third of the entire global market capitalization. Stock markets are down in shares. No one is interested to buy or sell the shares of companies in the stock market. This sudden shift in the stock markets is affecting individual savings accounts as well as employee pensions.
USA Dow Jones is now at 27.95%; UK FTSE is at 29.72%; JAPAN NIKKEI is at 26.85%; INDIA SENSEX is at 17.74%, and CRUDE BRENT is now at 39.24%. USA Dow Jones and UK FTSE have faced the hardest hit as this is their biggest quarterly drop that they have encountered in past years!
As a result, the investors are not willing to invest money in shares. However, national banks are cutting down saving account interest rates to boost the economy. But, many suspects that this pandemic is going to end many stable countries’ economies as well as frizzing the economic growth.
Small Businesses Cutting Down Resources: Countless People Jobless!
The Coronavirus pandemic is impacting businesses of all sizes. Small businesses and start-up companies are firing their employees as they aren’t making enough profit. Also, most of the employees who are losing their jobs are from the private sector. Also, local businesses are completely shut as most countries are under complete lockdown now. As a result, the workers and laborers of small local businesses are either losing their job or aren’t getting their salary.
According to the latest reports, more than 30 million US citizens have applied for unemployment benefits. This signals to the downgrading of the world’s largest economy! In the Uk, almost 1 million people have applied for unemployment benefits. With 1.3 Billion people, the Indian government is now struggling to feed the poor (30% of the Indian population)!
Oil prices crash globally: Crude oil war begins!
As the world’s busiest roads are fully empty, the demand for oil is very low. No one across the world is stepping out of their homes other than an emergency. Naturally, there is a very minimal demand for petrol and diesel worldwide. As a result, the cured oil prices are getting lower. Big crude oil producers, Russia and Saudi Arabia are in a face-to-face war. Due to this current scenario, crude oil price has dropped massively! While last year Brent Crude sold per barrel of crude oil at $75, now the price is as low as $20 per barrel. In addition to that, US oil prices have gone to -$37.63 per barrel, can you believe it! Now, it seems like that the world has more oil than it needs.
Due to Covid-19 Advanced world economics might face a recession in the coming days:
Generally, a growing economy means more profit, more wealth, and more new job opportunities. The GDP or Gross Domestic Product is the monetary value that represents a country’s current economic growth. It is estimated that the global economy might shrink by almost 1% in the coming days due to the COVID-19 pandemic. As a result, the GDP rate of countries across the globe will be affected!
Also, the IMF (International Monetary Fund) has said that the global economy might shrink more by 3% in the coming year! While countries like Canada, the US, UK, France, India, and Japan will face a lower GDP rate than before, China is the only country that will have a positive GDP rate with an increase! So, if the Coronavirus pandemic doesn’t fade away in the coming months, then the global economy will be doomed!
IT Sector opts for WFH:
Big MNCs like PWC, TCS, Accenture, Wipro, AGL, etc. are continuing their productivity by enabling work from home facility for their 70% employees. Now, the big IT offices are completely shut due to the Covid-19 pandemic. To sustain the productivity, WFH solution is indeed an effective move!
TCS is already planning to enable 60% employees WRH facility permanently from the coming 2025. This will reduce expenses on electricity and vehicle fuel consumption, allowing employees to work in the comfort of their home!
No international flights: Tourism Sector faces the crisis!
The global tourism industry is in great crisis due to the COVID-19 pandemic. Almost every country across the work has ceased international flights for at least 6 months. More than 100 countries have put strict travel restrictions and visa restrictions, forcing their people not to leave their homes.
As a result, the number of domestic and international flights per day has reduced. Many people have canceled their pre-planned business tips as well as holiday trips. The British government has canceled all International flights for the coming 1 year. The US government isn’t allowing anyone from outside to enter the US anymore! Looking at the current situation, it is clear that the tourism industry is in massive crisis which is hard to overcome in the coming months!
Online E-commerce businesses & streaming services are booming:
From groceries to regular commodities, people are ordering everything they need from online. As a result, online shopping sites like Amazon, Flipkart, eBay; Big Basket, etc. are making great profiles from their increased online sales!
Not just Online E-commerce Businesses are booming, the online streaming services are now in high demand. People are passing their free time at home by watching web series on different streaming platforms like Amazon Prime, Netflix, TikTok, and YouTube! Because of this high demand, these streaming platforms are making great profits with the increased number of monthly subscribers!
Criminal activities increased:
Due to the Coronavirus pandemic, criminals and hackers are exploiting different online businesses. As many IT firms are now working from home depending on the internet, these businesses are now extremely vulnerable to get attacked by online threats. In the past couple of months, this is a significant rise in the number of malicious websites that are attacking week online resources! Daily, more than 16k new Coronavirus related domains are getting registered. Many hackers are selling hacking tools and malware on discounts now.
Reduction in imports & exports:
The adverse effect of this prolonged lockdown is that most country’s importing and exporting businesses are no more operational. Developed economies are looking for ways to trade their good to the developing countries via different investment channels. The United States (US) and European Union (EU) have already seen a sharp decline in their imports & exports trades.
Developing countries that depend on tourism business and commodity exports are facing a greater economic crisis. Many countries have reduced the production of goods that they export. As a result, there is a visible decline in the commodity-related revenues as well. Many countries are in huge distress due to the reversal of capital flows and the increasing likelihood of debts. Many governments are trying to find a solution for consumption support.
UN Chief Economist Elliot Harris recently said that each country should focus on a collective goal for faster economic recovery after the pandemic ends. This will help to put the global economy back to a sustainable track. The UN-DESA has raised the alarms on March 31 for a large-scale and comprehensive multilateral amounting to at least 10% of the GDP.
Financial sector lingering:
Most of the countries across the globe are facing the domestic consumption slowdown. This is the result of the failure of many large financial firms like DHFL, IL&FS, etc. Now, India is dealing with the Yes Bank crisis even during the lockdown. Financial Banking Sector has already reduced their rate of interest on savings accounts. But, they are now planning to focus on individual investments. Let’s see what waits for the financial sector in the coming months!
Impact on the health sector:
In these challenging times, the doctors, nurses, and medical workers are the only hope for the survival of mankind. Nowadays, the doctors are treating an endless number of COVID-19 affected patients along with patients with other illnesses. Many doctors are tirelessly working day and night in hopes that the situation will be better. But, nothing is certain now!
The US health sector is completely shaken by the results of the Coronavirus pandemic. Many doctors and nurses are protesting against the government as they aren’t getting enough supplies. In many places, the locals are attacking the doctors just because they are unable to manage such a huge number of patients! Overall, it’s clear that the entire health-sector is completely shaken. But, the researchers are working on the formulation of a successful COVID-19 vaccine. Learn How To Boost Your Immune System During The Covid-19. Hopefully, we will get the good news soon!