ECONOMY QUARANTINED!!!

It has been very clear from the start of that covid 19 affects both the sides of the economy : supply and demand . The supply of goods and services is impaired because factories are at a hault , offices are shut and zero outout and revenue . The impact of the coronavirus and COVID-19 on businesses is changing almost daily. From employee absences to supply chain disruptions to plunging financial markets, businesses across the globe are scrambling to respond to the issue without overreacting

What initially seemed localised is worldwide and economic pain will go on for longer than first thought .Travel bans. Sporting events cancelled. Mass gatherings prohibited. Stock markets in freefall. Deserted shopping malls. Get ready for the COVID-19 global recession.

Up until a month ago this seemed far-fetched. It was assumed that the coronavirus outbreak would be a localised problem for CHINA and that any spillover effects to the rest of the world could be comfortably managed by a bit of policy easing by central banks.

When it became clear that Covid-19 was not confined to China and that the economic effects would be more widespread, forecasts started to be revised down. But central banks, finance ministries and independent economists took comfort from the fact that there would be a sharp but short hit to activity followed by a rapid return to business as usu

This line of thinking has exact parallels with the events of 2007, when it was initially assumed that the subprime mortage crisis was a minor and manageable problem affecting only the US – and nobody needs reminding how that ended.

If history is any guide, the global economy will eventually recover from the Covid-19 pandemic, but the idea that this is going to be a V-shaped recession in the first half of 2020 followed by a recovery in the second half of the year looks absurd after the tumultuous events of the past weeks.

The global economy is already in a recession as the hit to economic activity from the Covid-19 coronavirus pandemic has become more widespread, according to economists polled by Reuters amid a raft of central bank stimulus actions these weeks .

first piece on the virus shock was titled ‘bad or worse’; now we amend that to ‘really bad or much worse.’ We now expect Covid-19 to cause a global recession in 2020, of similar magnitude to the recessions of 1982 and 2009.”

Real GDP growth is expected to grow at a 0.6% pace in the first half of the year as disruptions associated with COVID-19 migrate from abroad. That level of growth is too weak to keep the unemployment rate from rising. Layoffs and furloughs are already happening in the travel and tourism industries. Factories are also scrambling to get much needed parts out of China.

The global economy was forecast to expand 1.6 per cent this year, about half the 3.1% predicted in the January poll, and the weakest since the global financial crisis of 2007-09. Forecasts for 2020 global GDP ranged from -2.0% to +2.7 per cent.

As governments make significant interventions in response to the coronavirus, businesses are rapidly adjusting to the changing needs of their people, their customers and suppliers, while navigating the financial and operational challenges.

With every industry, function and geography affected, the amount of potential change to think through can be daunting

The real economy is in shambles . Millions of people ,workers are being forced to be sheltered in one place and the factroeis and machines they operate are lying quiet . We are losing the use of land and knowledge , because the clusters of human beings necessary to build them on could spread a deadly disease …….

Lets do our bit by staying at home and staying safe #stayhomestaysafe.