Coronavirus:World Is Going Towards Economic Recession Or Depression?

Looking at the current situation world-wide, the economists are of the view that it will lead to global recession. The global economy has came to a halt due to coronavirus pandemic. The economies like the United States, Europe and other major economies are already facing major economic slowdown.

International Monetary Fund(IMF) has said that the world has entered a recession which is worse than the one in 2008. The ongoing  devastating situation in the countries like the UK, Iran, Italy, Spain and The United States forcing us to think that is the world really going towards Recession or Depression?

Recession is the negative economic growth for two consecutive quarters or six months while depression is the sustained and prolonged economic downturn that lasts for years rather than quarters. The example for this is the Great Depression that began in 1929 and lasted till late 1930's.

In economic terms, economic depression is even worse than recession as it is deeper and long lasting than recession. According to the Economists, the UK and the other European countries are already in a depression where the unemployment is increasing day by day because of the coronavirus outbreak. Social distancing is one of reason for this as the people are not at their work.
Coronavirus map

According to the report published by The United Nations Conference on Trade and Development, the world economy will go in recession with likely exception of India and China. But it is not like these two countries would remain unaffected. They will also face impacts like mega projects would get delayed, long term plans would get postponed by three to four years but overall they would not have much impact like the other countries.

This is because China had not lock-downed its major cities like Shanghai, Beijing and also has speedup the manufacturing capacity. China's foreign exchange reserve that accounts to total of more than three trillion dollars  is also sufficient to combat the ongoing economic losses.

India is assumed to survive economic recession if COVID -19 does not become the major issue in India and its condition will not become like Italy or US. India also does not depends on the export for its GDP, hence, even if global consumption reduces it will not have major impact on Indian Economy, with the assumption that the coronavirus outbreak remains under control in India. So we have to be prepared for every possible upcoming worst situation.

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