Effect of COVID-19 on the Global Economy

The spread of COVID-19 affected millions of people and brought their life to an end. Many people suffered through this pandemic, but the long term effects are going to bring the global economy down. The speed at which it spreads was alarming and the economic activity got a sudden stop. The government performed exceptional efforts to control and counter down the damage of COVID-19. Many people lost their work, educational institutes were closed, and global trade was also banned. And this left long-lasting scars on the economy.  Due to little investment, our economy suffered a lot, and every country searched for policies to cushion its economic damage. The economy was going in crisis and there were no strong reforms to support the economic health of the country. The public health system faced challenges, and the whole economy was being spent in economizing the crisis. This pandemic shrunk the percentage of the economy per capita of many countries.

This pandemic has decreased the chances of progress and people are again going back to poverty. This extreme loss of millions is going back to the years when people were struggling hard to develop as a nation. These downturns have given the developing economies a tough time to recover. Every sector including health care, tourism, trading, was in mounting debts. The financial conditions understated capital flows. More money was needed to manage the tight financial conditions which were particularly a hard task. A huge crash was observed in the oil prices, and the overall oil demand also increased, and this triggered the collapse of the economy.

The overall demand for metals likes, rubber, platinum which were used in vehicles rose to a high level, but their supply chain fell. The agriculture department was supplied well, but the supply of food was not so safe. Food security issues were seen in some places, and the delivery of the needed food was not fulfilled. Now all these multiple quarters weaken the economy, and the emerging markets were under pressure. All the sectors were under the influence of COVID-19 and they were going through tough times. All the industries working for the progress of the economy were closed during the pandemic. And this was another headwind for the global economy.

How different sectors were affected by the global economy:

1. HEALTH: Covid-19 affected the health sector the most, peoples’ lives were at risk and there was no vaccine available. a lot of money was used on arranging quarantine centres on an urgent basis, and the remaining money was spent on the medicine and ventilators. The already week health centres had to buy ventilators which were the most expensive task. More than half of the economy was spent on health sectors to save peoples’ lives.
2. TRADE: Due to sudden lockdown all the supplying chains were closed, and there was almost no trading at the global level. Nothing was exported or imported, due to which the wealth of the country was going down in every passing day. Trading is one of the necessary contributors to the global economy and if it comes down it can put the developing nation in crisis.
3. TOURISM: Tourism is one of the sources of income for the countries that are known for their cultural and historical assets. But due to this pandemic tourism was blocked completely, and the wealth coming from it became little to no. Everybody was staying at their homes, and there was no visit to historical places and beautiful geographical lands. This decreased the progress of the tourism sector, and as a result, the economic development declined.
4. EDUCATION: All the educational institutes were closed due to this pandemic and the people working in them lost their jobs. The taxes they were paying to the government also decreased and this affected the overall economy of the countries. Educational institutes play an important role in the development of the economy and when they were locked there was no outcome coming from them to help the countries in dealing with an economic crisis.
5. BUSINESS: All types of business including the small and big were going into loss due to prevailing lockdown because of COVID-19. Low budget businesses were making almost no contribution in the economy of Pakistan as they were already going through hard times whereas the business on a large scale was also not able to give benefit to the economy of the country.

All the sectors faced problems at different levels and because of this economic breakdown was observed at a large scale. Covid-19 affected the wealth of all the nations and especially the ones who were already with a weak economy.

And this was highlighted by Theodyssey several times in their blogs. The countries that were under this umbrella of loss have to work at least for 60 years to cope up with the damage done.