View of A STUDY EFFECT ON WORLD ECONOMY SINCE COVID-19

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ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING

Peer Reviewed and Refereed Journal, ISSN NO. 2456-1037

Available Online: www.ajeee.co.in/index.php/AJEEE

Vol. 06, Issue 06, June 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL) 5 A STUDY EFFECT ON WORLD ECONOMY SINCE COVID-19

Dr. Indira Dixit

HOD and Associate Professor, Commerce and Management Department, Choithram College of Professional Studies

1 INTRODUCTION

Corona virus disease (COVID-19) is an infectious disease caused by a newly discovered corona virus. Most people infected with the COVID-19 virus will experience mild to moderate respiratory illness and recover without requiring special treatment. Older people and those with underlying medical problems like cardiovascular disease, diabetes, chronic respiratory disease, and cancer are more likely to develop serious illness.

The best way to prevent and slow down transmission is be well informed about the COVID-19 virus, the disease it causes and how it spreads. Protect yourself and others from infection by washing your hands or using an alcohol based rub frequently and not touching your face.

The COVID-19 virus spreads primarily through droplets of saliva or discharge from the nose when an infected person coughs or sneezes, so it’s important that you also practice respiratory etiquette (for example, by coughing into a flexed elbow).

The economic damage caused by the COVID-19 pandemic is largely driven by a fall in demand, meaning that there are not consumers to purchase the goods and services available in the global economy. This dynamic can be clearly seen in heavily affected industries such as travel and tourism. To slow the spread of the virus, countries placed restrictions on travel, meaning that many people cannot purchase flights for holidays or business trips. This reduction in consumer demand causes airlines to lose planned revenue, meaning they then need to cut their expenses by reducing the number of flights they operate. Without government assistance, eventually airlines will also need to reduce lay off staff to further cut costs. The same dynamic applies to other industries, for example with falling demand for oil and new cars as daily commutes, social events and holidays are no longer possible. As companies start cutting staff to make up for lost revenue, the worry is that this will create a

downward economic spiral when these newly unemployed workers can no longer afford to purchase unaffected goods and services. To use retail as an example, an increase in unemployment will compound the reduction in sales that occurred from the closure of shop fronts, cascading the crisis over to the online retail segment (which has increased throughout the crisis). It is this dynamic that has economists contemplating whether the COVID-19

2 FIRST ESTIMATES OF THE IMPACT OF THE NOVEL CORONA VIRUS OUTBREAK

Corona viruses are a family of viruses that circulate among animals, but can also be found in humans. At the end of 2019, a new virus strain that had not previously been identified in humans was detected in the Chinese city of Wuhan (Hubei province). The novel corona virus – now referred to as SARS-CoV-2 – can cause mild, non-specific symptoms, including fever, cough, and shortness of breath, muscle pain and tiredness. More serious cases can develop severe pneumonia, acute respiratory distress syndrome, sepsis and septic shock that can lead to death. The virus is transmitted via respiratory droplets. The estimated incubation period is 2-14 days, but could be longer. There is currently no vaccine to prevent the 2019 corona virus disease (COVID-19), and no cure has yet been found. Much is still unknown, but researchers are working intensively to gain a better understanding about the novel disease

At global level, the WHO declared a public health emergency of international concern at the end of January 2020, as infections spread rapidly within China.

The situation is evolving rapidly. An increasing number of cases have since been confirmed outside of the country, including Europe. For the first time (as of 25 February 2020), there have been more new cases reported from countries outside of China than from within China. The

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ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING

Vol. 06, Issue 06, June 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL) 6 World Health Organization publishes daily

situation reports. On 2 may 2020, 34, 56,207 there were cases confirmed worldwide. The European Centre for Disease Prevention and Control publishes daily situation updates for the EU/EEA and the United Kingdom. In its strategic preparedness and response plan, the WHO outlines the measures required to deal with the crisis.

2.1 Impact of the corona virus pandemic on the world economy

The International Monetary Fund (IMF) has revised its global GDP growth estimate from 3.3% just 3 months ago to a contraction of 3%, something not seen since the Great Depression of the 1930s.

ET Wealth studies how India is placed inthis scenario.

Table S.

No

. Country Annual GDP ($ billion)*

GDP growth in 2019 (%)*

Covid cases/

Million^

Covid deaths /Millio n^

Total Mcap ($

BN)**

Mcap/

GDP**

Exp GDP Growt h (JAN)

#

Exp GDP Growt h (APR)

#

Bench- mark index PE**

1 United

States 20,544.34 2.30 1,855 79 29,149.4

1 1.42 2.00 -5.90 16.39

2 China 13,608.15 6.00 57 2 7,199.67 0.53 6.00 1.20 13.13 3 Japan 4,971.32 -0.70 60 1 5,237.09 1.05 0.70 -5.20 16.91 4 German

y 3,947.62 0.40 1,578 42 1,810.03 0.46 1.10 -7.00 18.30

5 United Kingdo

m 2,855.30 1.10 1,383 178 2,480.09 0.87 1.40 -6.50 16.77 6 France 2,777.54 0.90 2,195 241 2,046.90 0.74 1.30 -7.20 16.41 7 India 2,718.73 4.70 8 0.30 1,570.84 0.58 5.80 1.90 18.78 8 Italy 2,083.86 0.09 2,687 348 502.25 0.24 0.50 -9.10 16.16 9 Brazil 1,868.63 1.67 119 7 603.18 0.32 2.20 -5.30 14.28 10 Canada 1,713.34 1.80 717 24 1,797.05 1.05 1.80 -6.20 14.01 2.2 Pie Chart on Annual GDP

Pie Chart on GDP growth in 2019 (%)*

Pie Chart on Covid cases/ Million^

Pie Chart on Covid deaths/ Million^

20,544.34

13,608.15 4,971.32 3,947.62 2,855.30 2,777.54 2,718.73

2,083.86 1,868.63

1,713.34

Annual GDP ($ billion)*

United States China Japan Germany United Kingdom France India

2.3

6

0.4 -0.7 0.9 1.1 4.7

0.09 1.67

1.8

GDP growth in 2019 (%)*

United States China Japan Germany United Kingdom France India Italy Brazil Canada

1,855 57 60

1,578

1,383 2,195

8 2,687

119 717

Covid cases/ Million^

United States China Japan Germany United Kingdom France India Italy Brazil

79 2 1

42

178

241 0.3

348 7

24

Covid deaths/ Million^

United States

China

Japan

Germany

United Kingdom

France

India

Italy

Brazil

Canada

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ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING

Vol. 06, Issue 06, June 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL) 7 Pie Chart on Total Mcap ($ BN)**

Pie Chart on Mcap / GDP**

Pie Chart on Exp GDP Growth (JAN) #

Pie Chart on Exp GDP Growth (APR)#

Pie Chart on Bench-mark index PE**

2.3 United States

The death toll in New York has crossed 10,000 and the virus is now spreading to other states. Shutdowns are expected to continue for some more time.

2.4 China

With the Covid situation appearing to be under control for now, China is likely to continue to grow in 2020, though at a slower than before pace.

2.5 Japan

Though the Covid situation is reasonably under control, Japan’s fragile economy won’t be able to withstand global shutdowns.

2.6 Germany

The death toll is low, but Germany is still battling the virus and its economy is expected to contract by 7%.

29,149.41

7,199.67 5,237.09

1,810.03 2,480.09

2,046.90 1,570.84 502.25

603.18

1,797.05

Total Mcap ($ BN)**

1.42

0.53

1.05

0.87 0.46 0.74 0.58

0.24 0.32

1.05

Mcap / GDP**

United States

China

Japan

Germany

United Kingdom

France

India

Italy

Brazil

Canada

2

6

0.7 1.4 1.1

1.3 5.8

0.5 2.2 1.8

Exp GDP Growth (JAN) #

United States

China

Japan

Germany

United Kingdom

France

India

Italy

Brazil

Canada

-5.9 1.2

-5.2

-7

-6.5 -7.2

1.9 -9.1

-5.3 -6.2

Exp GDP Growth (APR)#

United States

China

Japan

Germany

United Kingdom

France

India

Italy

Brazil

Canada

16.39

13.13

16.91

18.3

16.77 16.41 18.78 16.16

14.28 14.01

Bench-mark index PE**

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ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING

Vol. 06, Issue 06, June 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL) 8 2.7 United Kingdom

The number of new cases detected and the death toll remains high. The negative impact on the economy will be significant.

2.8 France

After Italy and Spain, France is the worst hit by Covid in Europe. Due to prolonged shutdowns, its economy is expected to contract by 7.2% in 2020.

2.9 India

IMF says India will remain the ‘fastest growing major economy in 2020’. But one must remember that the Covid onslaught is only at an early stage in India.

2.10 Italy

Covid has ravaged Italy and its fragile economy. As per IMF’s prediction, Italy will be the ‘maximum contracting major economy in 2020’.

2.11 Brazil

The virus onslaught is at a starting stage in Brazil and therefore, its negative impact on the economy may be higher.

2.12 Canada

The speed at which Covid had been spreading is slowing down now, so the need for long period of lockdowns may come down too.

Source: (World meter; Data as on 14 April 2020. Compiled by ETIG).

Forecasted global real Gross Domestic

Product (GDP) growth due to the corona virus (COVID-19), from 2019 to

2021

Source

https://www.statista.com/statistics/110 2889/covid-19-forecasted-global-real-gdp- growth/

3 CONCLUSION

The novel corona virus pandemic, or COVID-19, is predicted to have an impact on the global economy. Where the global real Gross Domestic Product (GDP) grew by 2.9 percent in 2019, it is forecasted that COVID-19 will cause the global real GDP growth to decrease by 0.5 percent in 2020 compared to the previous year, to 2.4 percent growth.

While there is no way to tell exactly what the economic damage from the global COVID-19 novel corona virus pandemic will be, there is widespread agreement among economists that it will have severe negative impacts on the global economy. Early estimates predicated that, should the virus become a global pandemic, most major economies will lose at least 2.4 percent of the value their gross domestic product (GDP) over 2020, leading economists to already reduce their 2020 forecasts of global economic growth down from around 3.0 percent to 2.4 percent. To put this number in perspective, global GDP was estimated at around 86.6trillion U.S.

dollars in 2019 – meaning that just a 0.4 percent drop in economic growth amounts to almost 3.5 trillion U.S. dollars in lost economic output. However, these predictions were made prior to COVID-19 becoming a global pandemic, and before the implementation of widespread restrictions on social contact to stop the spread of the virus.

India's GDP growth for the current fiscal is expected to slow down to 4.8 per cent, a UN report has said, warning that the COVID-19 pandemic is expected to result in significant adverse economic impacts globally. India's GDP growth for the fiscal year 2019-2020 was estimated at 5 per cent and is forecast to slow down to 4.8 per cent for the current fiscal 2020- 21. Economic growth for the country could stand at 5.1 per cent for fiscal year 2021-22, the report said.

REFERENCES

1. General view of the Canary Wharf financial district, as the spread of the corona virus disease (COVID-19) continues, London, Britain, April 6, 2020. REU

2. Reports of world health organization

3. https://www.ncbi.nlm.nih.gov/books/NBK92 477/

4. https://www.statista.com/statistics/110288 9/covid-19-forecasted-global-real-gdp- growth/