2. COVID-19
Coronaviruses are a group of related RNA viruses that cause diseases in mammals and birds. In
humans, these viruses cause respiratory tract infections that can range from mild to lethal.
The coronavirus outbreak came to light on December 31, 2019 when China informed WHO of
cases of pneumonia of an unknown cause in Wuhan City in. Subsequently the disease spread to
more Provinces in China, and to the rest of the world.
Until now the novel coronavirus has claimed the lives of over 5.3 lakh (538,780) people
worldwide, while over 11.64 (11,645,109) million are battling the infection.
As vaccine is yet to be found, lockdowns remain the only way to slow its spread. However, the
lockdowns are also pushing major economies to the brink.
3. THE IMPACT OF CORONAVIRUS ON
STOCK MARKETS
Big shifts in stock markets, where shares in
companies are bought and sold, can affect the
value of pensions or individual savings accounts
(ISAs).
The FTSE, Dow Jones Industrial Average and the
Nikkei all saw huge falls as the number of Covid-
19 cases grew.
The Dow and the FTSE saw their biggest
quarterly drops in the first three months of the
year since 1987.
4. RISING
UNEMPLOYMENT
The ILO stated on 7 April that it predicted a
6.7% loss of job hours globally in the
second quarter of 2020, equivalent to
195 million full-time jobs. They also
estimated that 30 million jobs were lost in
the first quarter alone, compared to
25 million during the 2008 financial crisis.
In March 2020, more than 10 million
Americans lost their jobs and applied for
government aid and unimployment rate hits
10.4%.
The lockdown in India has left tens of
millions of migrant workers unemployed.
In January and February 2020, during the
height of the epidemic in Wuhan, about
5 million people in China lost their jobs.
5. RISK OF RECESSION
The IMF on June 24 projected a sharp contraction of 4.5% for the Indian economy in 2020, a “historic low,” citing
the unprecedented coronavirus pandemic that has nearly stalled all economic activities, but said the country is
expected to bounce back in 2021 with a robust 6% growth rate.
The International Monetary Fund (IMF) projected the global growth at -4.9% in 2020, 1.9 percentage points below
the April 2020 World Economic Outlook (WEO) forecast. It described the decline as the worst since the Great
Depression of the 1930s.
The U.S. is expected to contract at a forecasted 6.1% this year due to pandemic-caused restrictions and
disruptions. The Euro Area is projected to shrink 9.1%. Japan is expected to shrink at 6.1% due to preventative
measures that had impacted economic activity. China is expected to slow to 1% in 2020, its lowest rate in more
than four decades.
6. IMPACT BY SECTOR
Various service sectors are expected to be hit especially hard by the coronavirus recession
and lockdowns imposed by governments
Automotive industry:- Manufacturing units around the world have been shut down,
footfall in showrooms have fallen sharply, and vehicle sales have taken a huge hit. For
already struggling automotive industry, the global economic trade impact of COVID-19
pandemic on automotive industry is estimated to be around $ 5.7 billion with European
Union the worst-hit region at $2.5 billion decline in automotive industry due to disruption in
automotive supply chain amid reduction in supplies from China. New vehicle sales in the
United States have declined by 40%. It is estimated that there will be an overall revenue
impact of at least $1.5 -2.0 bn per month across the industry in India.
Energy Sector :- The outbreak has contributed to a dampened demand for oil, resulting in
plummeting prices and declining production, especially in the wake of the Russia-OPEC
price war. According to the IEA Oil Market Report – April 2020, global oil demand is
expected to fall by a record 9.3 mb/d year-on-year in 2020. Demand in April is estimated to
be 29 mb/d lower than a year ago, down to a level last seen in 1995. Covid-19 has also
accelerated the continued drop of gas prices. The analysis of Department of Labor data in
US found that 106,472 workers in clean energy occupations filed for unemployment benefits
in march.
Food and Agriculture Sector :- The COVID-19 pandemic affects the global food industry
as governments close down restaurants and bars to slow the spread of the virus. Across the
world, restaurants' daily traffic dropped precipitously compared to the same period in 2019.
In June 2020, the United Nations warned that the world was facing the worst food crisis in
half a century due to the recession caused by the pandemic. In India The bumper harvest of
wheat in the northern part of India hobbled due to shortage of labor and transportation
bottlenecks. The plummeting demand for meat and poultry resulted in an unimaginable
plunge in their costs resulting in a loss of ₹ 22.5 million (USD 300 000) for the industry.
Retailers took advantage of the lockdown situation by imposing exorbitant prices on existing
stocks. Black marketeers was on the rise that sold essential commodities at an outrageous
price. Karnataka, the largest coffee-producing state in India was unable to sell coffee as
there were no traders and workers. Tons of cured coffee worth USD 52 million was piled up
in the warehouses due to the blockade in the supply chain.
7. COVID-19 IMPACT ON VARIOUS ECONOMIC SECTORS
Retail Sector :-The lockdown implemented by the Governments to prevent the spread of COVID-19 has greatly affected the retail business.
Most stores, except stores selling Essential Food & Grocery, have been shut across the country. Garments, Saris, Electronics, Mobile Phones,
Furniture, Hardware, etc. almost all stores are closed. Non-Grocery/Food Retailers are reporting 80% to 100% reduction in sales. Small
Retailers are expecting to lay-off 30% of their manpower going forward, this number falls to 12% for Medium Retailers and 5% for Large
Retailers.
Tourism :- The World Tourism Organization states international tourism could decline by 60-80 per cent in 2020 due to the Covid-19
pandemic, resulting in the revenue loss of $910 billion to $1.2 trillion and placing millions of livelihoods at risk. Prevent the spread of COVID-
19 many governments banned international flights and it causes sharp fall in numbers of foreign tourists. On account of Coronavirus, the
Indian tourism and hospitality industry is expecting a potential job loss of around 38 million. In the third week of March 2020 itself, the hotel
sector saw a decline of more than 65% in occupancy levels as compared to the same period in 2019. Indian Association of Tour Operators
(IATO) estimates the hotel, aviation and travel sector together may suffer a loss of about ₹85 billion keeping in mind the travel restrictions
imposed on foreign tourists.
Transport :- The pandemic has had a significant impact on the aviation industry due to the resulting travel restrictions as well as slump in
demand among travelers. Significant reductions in passenger numbers have resulted in planes flying empty between airports and the
cancellation of flights. With international and domestic travel on halt Many airlines like Air Mauritius, Avianca have gone bankrupt or
into administration. The cruise ship industry has also been heavily affected by a downturn, with the share prices of the major cruise lines down
70–80%. Aviation industry in India could incur losses worth ₹ 27,000 crore ($3.3-3.6 billion) in the first quarter of 2020-21. The passenger
growth of airlines is likely to fall sharply to a negative 20-25% growth for the 2020-21.
8. GOVT EFFORT TO SUPPORT ECONOMY
Facing an economic maelstrom, global economies have begun to deliver a robust fiscal response to tackle the coronavirus outbreak.
Nations across the world have come up with a mixture of tax incentives, loan guarantees, wage subsidies in order to shield their
citizens as well as its enterprises from the devastating effects of the pandemic.
USA :- On March 6, 2020, President Donald Trump signed a spending bill of $8.3 billion to fight the pandemic. On March 13, the USA
government announced a state of emergency, allowing the Federal Government to distribute up to $50 billion in financial aid to states,
cities, and territories.
China :- The Peoples Bank of China has implemented several policies to provide economic relief during the coronavirus outbreak.
The bank expanded reverse repo operations by $245 billion. On March 5, the Chinese authorities allocated $15.93 billion for
coronavirus-related funding. On March 13, China's central bank launched $79 billion stimulus effort to help the country's ailing economy.
Italy :- Italy has announced a rescue package of up to $28 billion. The 25-billion-euro package includes- 10 billion euros allocated to
support employment, 3.5 billion euros to strengthen healthcare system and individual cash bonuses to the Italians still working during
country-wide lockdown. The package also include loan guarantees to small and medium businesses hit by the crisis.
UK :- The United Kingdom has sanctioned $424 billion to fight the coronavirus pandemic. The amount includes 12 billion pounds to
help national health services. The government has also announced loan guarantee to businesses threatened by the coronavirus
pandemic. In addition to this, the UK government has also announced 20 billion pounds of tax cuts, a three-month mortgage payment
holiday for borrowers affected by COVID-19
INDIA :- India announced Rs 20 lakh crore stimulus package which works out to roughly 10 per cent of the GDP, making it among the
most substantial in the world after the financial packages announced by the United States The Rs 20 lakh crore package includes Rs
1.7 lakh crore package of free foodgrains to poor and cash to poor women and elderly, announced in March, as well as the Reserve
Bank's liquidity measures and interest rate cuts. While the March stimulus was 0.8 per cent of GDP, RBI's cut in interest rates and
liquidity boosting measures totaled to 3.2 per cent of the GDP (about Rs 6.5 lakh crore).
9. THANK YOU
BY TAPENDRA KUMAR
What We Can Do
The news about coronavirus may leave some people feeling helpless, like there’s nothing we can do but wait for the
worst. But that’s not true. In fact, there are plenty of actions you can take to help those around you, and yourself –
and to feel like you’re really making a difference. You’ll help blood banks nationwide meet the need for blood, platelets
and plasma, which hasn’t gone down even though many blood drives have been canceled in areas where coronavirus
cases are more common.
People with low incomes, or whose work is being interrupted by cancellations of events, travel, or education due to
coronavirus, will need more help than ever. Find a food bank near you that could use donations of food, toiletries or
money, and possibly volunteers or help migrant workers by providing them food and other things .
Older adults, and people with serious illness or disability, should avoid public settings because they’re more
vulnerable to getting seriously ill from coronavirus. But they still need food and human interaction. So help them in
their needs.
You can help protect people who are taking care of COVID-19 patients, and patients receiving care for any reason.
Help trustworthy stories and explanations related to coronavirus reach more people, by seeking them out from
reputable sources such as major media outlets, government agencies, hospitals and nonprofit health organizations.
