Economic toll of a pandemic

There is no point in denying the fact that these are definitely dark times. With a fierce pandemic ravaging the human race at large, there are many dangers that the world is facing now. The most massive out of them being two – the relentless numbers of people dying and the blow that the economy is suffering right now and will continue to suffer in the forthcoming years.

The pandemic COVID-19 has not just terrorized our health situations but our economic situations as well. With the economy rapidly declining down a steep slope, there are a number of things that we have to deal with at the earliest. Alarming as it sounds, this pandemic has taken a serious toll on each of the 200+ countries of the world and the damage has been made on several levels. COVID-19 is the most recent example.

Let us not forget that over the years, the world has been threatened by more than one such pandemic, which has affected the global economy accordingly. This article aims at exploring a few of them. Read on to find out more.

1. Production is at a standstill

With the pandemic always in the background, threatening lives, persists, more and more workers are being taken in on account of being sick and affected. To let them continue with their duties despite everything, would risk not just one but several lives. According to a very recent survey, 1 COVID-19 infected person has the capability of infecting approximately 400 people in a single day. Thus, as the workers remain at leave, the production of goods – both essential and non-essential is hampered and, eventually comes to a complete standstill.

2. Lockdown restricts all sorts of business

With all international and also in some cases national borders too, all sorts of businesses, small or big, are affected big time. For example, a farmer in Kerala who earned his living by exporting coffee beans is now incurring a huge loss since due to lack of transportation, he is unable to export it anymore. The difficulties which begin at a very preliminary level sets off a chain reaction, which then affects every level of the business and ultimately affects the country’s GDP at large.

3. Stock markets utterly crash

Unfortunately, for all those who have invested in the stock markets, this is a time of utter disappointment because let us face it – the stock markets have crashed and your returns are looking really bad. And they will continue to do so for a while. However, it is only very obvious. With all transactions at a standstill, it is bound to happen. As recent reports claim that, in India, NIFTY has now failed to hold on to even 9000.

4. The global recession

Now that the businesses are incurring all the loss and given the fact that they are completely standstill, the employer would have to lay off certain employees to curtail the costs and also in order to survive. So, what ensues the pandemic is a global recession. What is more is that the recession that would be faced by the world after the COVID-19 lockdown would be worse than the world has ever seen before. It is being said by certain experts that, in India alone, approximately 9 crore people are at risk of permanently losing their jobs. They are also of the opinion that the businesses that shut down during or after this pandemic might not have any scope of revival whatsoever.

5. Nations will be in huge debts

It might sound utterly scary, but this is not some sort of surprise. In facing the pandemic, the countries have all used up their emergency funds. International businesses are closed. Countries have traded PPE and medicines and other necessary supplies among them at a cost, which probably was too much to bear for a country at that point of time. Maybe for that reason, on humanitarian grounds, some other country has decided to come forward and help each other. The most recent example of this being the United States offering a huge sum to India in exchange for hydroxychloroquine, which as per WHO guidelines, can apparently keep COVID-19 a little under control.

6. High demand and no supply

This is one of the most common economic effects that countries face in a pandemic situation. With exports at a halt, supplies are limited. However, the demand does not cease to exist or tend to go down. In such cases, there are two things that mainly happen. First, the supplies run out. Second, the supplies so available are sold off at overtly increased prices. As a result, there is a rise in the black market. Both these issues are equally detrimental to the economy of the countries.

7. Perishable goods get wasted

With a lack of transportation and also due to the lack of a proper consumer market, perishable produce like fruits and vegetables are being wasted. In India alone, tons of watermelon and grape produce have been wasted over the past few months. The situations are quite similar in other countries as well.

8. Widening of the gap between the rich and the poor

The gap is always there, but just after the pandemic, it grows wider than ever. With increased costs of living and extra costs to bear, it is actually the middle class that suffers the worst. However, the economic gap increases in general.

To conclude, it can be said that it is true that after dealing with a pandemic, the economic situations get really tough. However, if addressed properly and at the right time, it is possible that the countries would be able to revive really quickly.

So, why not start from today itself!

That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.

(About Author:  Arindom is a professional writer, editor, blogger and a member of the International Association of Professional Writers and Editors, New York. A management postgraduate in finance with extensive industry exposure, he is associated with many reputed global online magazines and publications as a regular contributor. He loves to help his readers writing highly informative and well-researched investment-related content to make informed decisions.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of organization)

With this one can say “Mutual Fund Sahi hai”,  so let me do Nivesh / Enquire