Covid-19 first appeared in China in December 2019 and has spread widely to over 180 countries. The virus is a big blow on the global economy due to its mode of transmission that has forced most people to stay indoors. Many have either had to work from home or not work at all. It has also caused huge job losses due to its economic effects or uncertainties.
Already, there has been a huge dip in the stock market with many companies seeing a significant fall in their value. When investors aired their fear of an economic collapse due to the virus, many governments tried to respond by slashing interest rates. This would lower the cost of borrowing, thus encouraging spending. In theory, such responses would save or boost the economy. However, with the virus continuing to numb people’s spending freedom, stock prices keep on falling.
Oil is one of the many commodities that has felt a significant hit. With people remaining indoors and many industries shutting down, the price hit the lowest price in 21 years. This would have been good news during normal times, but due to current times, it would be tough to avoid a recession.
The travel industry is the worst hit with countries putting restrictions on flights. However, this has caused a boom in tech firms such as Zoom. As more people remain at home but still have the need to work, Zoom has significantly increased in demand which has led to more sales.
It is hard to tell how long this crisis will last, but the main focus currently is on preventing deaths.