CORONA : THE COLLAPSE OF ECONOMY

Have you heard a saying by Vladimir Lenin which says that, “There are decades where nothing happens and there are weeks where decades happens.” We all cannot deny that the past few weeks have witnessed a downfall in the global economy, Can we?

The outbreak of COVID-19 has undoubtedly created a dent in the global economy. The pandemic has adversely affected all the spheres of an economy.

Let’s see the impact of this pandemic on the sectors of the economy as a whole :

Manufacturing sector :

This sector has witnessed the supply shocks in terms of raw materials which were being supplied by the China. Not only this there has been a withdrawal of labour force too creating a general strike. The situation of the industries which follow JIT (Just in time) model of procurement might be much worse.

Retail sector :

The outbreak of the pandemic has led to consumer cutbacks on account on precautionary savings. Preventive measures such as social distancing, quarantines etc. has resulted into decline in the activities of malls, theatres, supermarts, restaurants, clubs etc. hitting the hospitality sector badly.

However the pharmaceutical companies out there can initiate the research and development of vaccines thereby grabbing this opportunity in their favour.

Transportation sector/ Travel Industry :

The start ups like Ola & Uber are also badly affected as people are avoiding the use of such modes. Railways are also witnessing the after effects of the pandemic. Air lines too are facing the cancellations of tickets since the restrictions are imposed to avoid the international traffic and to curb the spread of virus.

Tourism sector :

According to industry chamber CII, this is one of the worst crises ever to hit the Indian tourism industry impacting all its geographical segments, tourism verticals- leisure, adventure, heritage, pilgrimage etc. which in turn will adversely affect the revenue generated from this sector.

Education sector :

All the education institutes are also being closed to ensure the well being of students. However this may be an opportunity to capitalize upon for the Tech companies out there to bring up the E- learning tools in these institutions.

Investment sector :

There has been a drastic fall in the FII sector with the outbreak of this news and the stock market has witnessed the bloodbath. The financial markets have been volatile and, this merely on the behavioural aspects of the investors and on the basis of fundamentals of the company. To a certain extent, the friction between Saudi and Russia which led to decline in oil prices also has an impact in the economy.

In a nutshell the pandemic has led to devastating consequences in an economy. The policy makers here needs to consider the monetary as well as non monetary consequences of this pandemic and re- estimate the growth rate, accordingly give effect to monetary and fiscal policies in order to revive the economy.

Do share your views on the consequences which the pandemic has on global economy.

Take Care, Stay Safe.

AUTHOR : ANISHA AHUJA (CLICK HERE TO VIEW PROFILE)