Corona Crisis: Will the global economy ever be normal again?

The entire world has come to a deadlock with the outbreak of the new coronavirus. There is a lot of speculation about the recent state of stagnation and blockade, just like any other period in history. Which time of the past exactly compared to the year 2020? 1914, 1929 or 1941?
Corona Crisis: Will the global economy be normal again?



If you want to find the answer, you have to be disheartened. Because the current situation is completely distinct from the two world wars and the Great Depression of the thirties. This situation is not even similar to the Spanish flu that started in 1918. Because the world today is structurally different from those earlier times. The new coronavirus has therefore historically put the whole world in a new crisis.
The global epidemic caused by the new coronavirus is one aspect of this crisis. Another serious aspect is the economy. The crisis has plunged the global economy into a catastrophe. Exactly how much?

Let's look at the United States. The country's economy is expected to shrink by a quarter from normal, equivalent to the Great Depression of the 1930s. The problem is, the contraction lasted for four years during the Great Depression. And now it will take a few months at most. There has been such a dire situation, never before.

Just five weeks ago, the U.S. unemployment rate was at a record low in early March, rising to 13 per cent by the end of March, according to a Foreign Policy report on the U.S. economy. This rate is the highest since World War II. As one can see, the unemployment rate in the country is increasing at an average rate of 0.5 per cent per day. If this continues, the rate is expected to rise to 30 per cent before the end of summer.
Corona Crisis: Will the world's economy be normal again?

Not just the United States. The whole Western world is facing a dreadful economic crisis. The housing, construction or labour-intensive industries, whose production is largely dependent on investor activism, have been hit hard. The negative impact of these sectors is again affecting all other indicators of the economy.

The new coronavirus has hit sectors such as retail, housing, education, entertainment, hotels and restaurants. This is called the beginning of the cataclysm. The retail sector was already under pressure from e-commerce sites. It is now in a crisis of existence in rich countries as things like lockdown are now associated with it. In many cases, it may be seen that in the current situation, the closed shops may not reopen.

The Foreign Policy Report says that in many European countries, some steps have been taken to handle the economy. But it will do more to conceal the severity of the crisis, not solve it. Because economic activity has reduced. Although the plight of the citizens can be reduced through various measures, the way of nurturing of the economy is not right. Northern Italy is not only the main tourist destination, but it also supports 50 percent of Italy's gross domestic product (GDP). Germany is not able to save itself even with many significant steps.

It will have a devastating effect on the country's GDP, which is even greater than in the United States.
Corona Crisis: Will the world's economy be normal again?
Japan is likely to face the biggest economic difficulties, although the prevalence of the virus in the country was lower than in many other countries.

The crisis in other countries is also critical. The problem is that in the case of rich countries the economic calculation can be done but in the case of many other countries it is not possible due to lack of proper information. As for China, the unemployment rate in the country has surged to 6.2 percent due to Covid-19. This is the highest in the country since 1990. Although China says it is optimistic they will deal with it, but fear remains.

Let's focus on India. Since the outset of the lockdown in India, many heartbreaking stories have come to light, which has not been seen since 1947. This story will continue to grow. But all information could not be disclosed. Because of information-crisis. Just one piece of information is enough 470 million people in India are employed, of which only 19 percent are covered by social security programs. More than two-thirds of employees have no formal contract. Of these, about 100 million are migrant workers.

Economists say sufferings of people all over the world, have turned statistics into a joke. The GDP, which was deemed a reliable indicator of global development after World War II, will see a harsh contraction, according to statistics. The global model of development is static.
Corona Crisis: Will the world's economy be normal again?
The cause of the collapse is again not the financial crisis, nor even the direct result of the epidemic.

It may sound as strange, the truth is that the rulers of those countries have adopted the policy of ratifying this collapse of their own free will. But it is not as easy to conclude to stabilize the economy as it is to move it.

In this time of coronavirus, governments are giving various incentives to save various sectors so that people accept various administrative measures including lockdown. This incentive is being given in various sectors starting from agriculture and industry. But the economy is literally stagnant. This money is a loan, which will be kept by the central banks in times of crisis. But once the crisis is over, the question of its coordination will come to the fore. In other words, the matter will be on the shoulders of common people again.

Governments will try to regain this money by reducing spending and raising tax rates. Because of these two steps, the confidence of the common people will rise, a large part of whom will be destitute in those days. It will bring a whole new crisis in every country in the world. Because everyone is affected, there is no opportunity to handle the situation even by bringing in grants or loans from outside.

"This is a bigger crisis than the financial crisis," Angel Garr, secretary-general of the Organization for Economic Co-operation and Development (OECD), told the BBC. The notion of ​​reversing this circumstance is nice but probably impossible. Most large economies will confront the recession. Many are saying that the way it is falling, it will rise. I don't think so.
Corona Crisis: Will the world's economy be normal again?
Jesse Edgerton, an economist at JPMorgan, a US multinational investment bank, agrees. "The best thing that can happen is that we're going to get back to normal soon," he told Vox. But I personally don’t think that will happen, ”said Greg Deco, an economist at Oxford Economics.

Economists say this is a crisis where one can only expect to return to normal life. It may not be feasible to recover from the economic damage that has been done and is being done. Because, from then on, in every flu season, people can become very careful. Administrative measures may also be taken to avoid such a situation, which will not allow the current economic structure to function properly. Without a new pattern or major overhaul of the existing structure, there will be no other way.

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