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Coronavirus leaves unprecedented setback in the global economy

By : Mahmoud Hassanein

All of a sudden the world is hit by a very new and strange virus. Through little number of days, it becomes a pandemic.

For the first time in history, all countries are cooperating to put an end to this strange enemy. Here we are going to discuss the impact of the Coronavirus on the economy.

Some people believe that there will be a decline in the economy, and the coronavirus may destroy the economic growth globally.

The world is facing a pandemic situation and for this extraordinary time, we need extraordinary measures,” said Nadeem Aslam, chief market analyst at Avatrade. “The Fed cutting the interest rate to zero and restarting the quantitative easing package is the biggest nuclear bazooka.

In order to stop the decline, central banks should slash the interest rates. Making borrowing cheaper and encourage spending to boost the economy can help. In the United States, the number of people filing for unemployment hit a record high, signaling an end to a decade of expansion for one of the world’s largest economies.

Transport and travelling are badly affected by the pandemic, with airlines cutting flights and tourists cancelling business trips and holidays.

Governments around the world have introduced travel restrictions to try to contain the virus.

Travelers are banned in an unprecedented step due to the coronavirus crisis. Data from the flight tracking service Flight Radar 24 shows that the number of flights globally has taken a huge hit.

In order to stop the spread of the Covid-19 outbreak, many countries across the world have started implementing very tough measures. Countries and world capital have been put under strict lockdown, bringing a total halt to major industrial production chains.

However are there any people who get benefitted from the crisis?

Supermarkets and online delivery services have reported a huge growth in demand as customers stockpile goods such as toilet paper, rice and orange juice as the pandemic escalates.

The new images clearly show how a strong reduction in emission is now in place over major cities across Europe – in particular Paris, Milan and Madrid.                

 Investors fear that the global spread of the virus will further hit the global economy and demand for oil. Coronavirus has driven the price down further. Investors fear that the global spread of the virus will further hit the global economy and demand for oil

Will the market drawdown truly signals a recession, how bad a Covid-19 recession would be?

The drawdown in global financial markets indicates that the world economy is on a path to recession. Nearly all the world will be affected by such a recession. It will take a long time or all the countries to get rid of.

The impact of the Corona Virus on Arabic economies

            Apart from the Gulf economies, many Arabic countries suffer from the lack of medical services and even poor infrastructure.  So once there is many coronavirus cases appear, they may not be able to deal with the large number of the affected people. The only available solution is ordering the people by any means to stay at home. Unless there is a suitable plan to avoid the results, the crisis will result in more unemployed people, more poverty and more high prices.

            As for the Gulf economies, it will be affected by oil prices, tourism and capital markets .Many Middle Eastern nations rely heavily on oil revenues, while Saudi Arabia and the United Arab Emirates will see a major hit to tourism if the virus affects the pilgrimage season and Expo 2020 Dubai respectively.

Oil is one of the “principal” export products of Gulf Cooperation Council countries, and prices have fallen dramatically .Saudi Arabia said it would raise production and give discounts on its oil. Spending by foreigners is also likely to take a hit because of the coronavirus, particularly in Saudi Arabia and the UAE.

The UAE attracts more than 17 million visitors every year, Damak said, and this year it hopes to attract 25 million travelers to Expo 2020 Dubai in October. Saudi Arabia receives 20 million tourists annually, most of them for religious purposes. The pilgrimage season — which starts in July — will be affected by the virus outbreak.