As we all witness this tragic event which has halted our lives and has diagnosed over 780,000 people globally and taking the lives of thousands of innocent people in society. This health crisis has a significant impact on businesses on a global level establishing an economic fallout & signaling shocks to supply and demand dramatically.
Though different targeted policies are needed to support the economy's downfall by keeping intact all the economic and financial relationships between different businesses and workers, borrowers and lenders, and different suppliers and end-users. The main goal is to prevent the downfall of different businesses which can harm different communities of societies and firms through job losses and liquidations.
As we all know that this disease is spreading quickly. With over one-third of our community being affected directly, this is no longer a regional issue—it is a global crisis calling for a global response from all the countries. This shall be little shocking for all of us that this virus has affected dramatically both supply and demand with reference to: -
Restricted supply chain due to which there is restricted mobility and higher costs of executing business
Will have an adverse effect on demand due to higher unreliability, increased discrete behavior, limited constraints, and rising financial costs that reduce the ability to spend
Has affected border trades and businesses very dramatically
The economic impact is already visible in different countries due to this virus outbreak. For example, in China, the manufacturing and service sector has declined dramatically in February. As we all know that the drop in manufacturing will affect the services and vice versa. Due to this financial crisis the global supply and demand for dry bulk shipping stocks such as building materials and commodities has also dropped significantly. This drop has also been seen in the recent epidemics’ such as the 9/11 attacks.
Due to this virus different businesses disruptions have lowered production, creating shocks to supply due to shortage of labor supply. All the offices and businesses are completely shut down as there is a surge in increased mortality. There are lockdowns all over the world due to which the firms that rely on supply chains are unable to get the parts they need, whether it is via domestic or international firms.
The tourism and hospitality sectors have also been affected by this Covid-19 virus as all the domestic and international flights have been cancelled. Due to which the tourists around the globe have stopped travelling which has increased the fear of contagion and loss of jobs as different tourism industries are unable to pay salaries to their employees due to complete closures. This is creating for the government to inject funds to ensure that these industries don’t fall further in debts. The share market has faced a dramatic decline due to rapid downfall in all the businesses all over the world.
Due to the recent reports all the Smartphone industries such as Lenovo, Apple, Oppo, Xiaomi, Motorola and many more are shutting down due to government/state order lockdowns which may cause a fall of about 40% in sales for the upcoming months.
Closure of different malls and markets people are facing a lot of trouble in getting daily used products such as vegetables, grocery items, cosmetics, milk etc. all over the globe. The daily wages workers who depend on daily work are facing a cashless crisis due to this epidemic situation.
Definite actions that the government across globally have adopted during such hurtful times that many of us have never witnessed during our life are listed below:
Rent payments have been halted for many businesses and society
Late payment fines for loans to be waived off
Providing loan assistance to vulnerable society at low interest rates
Flexible tax and social security payments
Support child benefit payments and provide emergency care to workers who don't have access to paid sick leave
Increase pension pay for the needy
Reduce VAT for businesses that are affected
Providing financial aid assistance to companies
Assisting self-employed workers with financial need
Debt Repayment Options
Government support for companies paying redundancy payments
Freeze on any worker layoffs and a cash bonus for workers still working during lockdown
Repatriation of Nationals globally to ensure they are back safely to their home country
Funds set aside for development of vaccine to combat the virus
The above are certain of the measures being adopted by governments but there are many more policies and stimulus packages that are being adopted by countries to tackle this battle that no one knows when it will come to an end.
In the nutshell all the different sectors whether it is Telecom, Private or Government all are facing a rapid downfall and we all will continue to see this in the coming months. We all hope that things change as this will affect how people do businesses globally and people’s way of thinking will change completely. Globally the society should stick together through such challenging moments as we will surely get out of it.
Girish Rohra Chawla
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