Worst financial crisis to come since 1930. Image Courtesy – https://www.fool.com
Fear has started haunting in our mind as coronavirus pandemic continues that we are proceeding towards a situation where an acute financial crisis will be our companion. Several economic experts are worrying over the matter. Global economic growth will be negative this year. It will be the worst economic crisis since 1930.
Lockdowns are essential to fight with the virus, but as a result of this many companies got closed fully or partially. A survey by the United Nations says that more than 80% of the world’s workforce facing disruption in jobs.
The Managing Director, International Monetary Fund, Ms Georgieva made an analysis that developing countries and promising markets would be highly affected by this pandemic, and would require billions of dollars of foreign support to make it normal again.
With this aftermath, the number of Americans pursuing unemployment benefits will be more than 16 million. The Federal Reserve System in the US announced to give a supplementary loan of $2.3 trillion to small and medium business, several US cities and states to balance with the loss during restrictions on activity for coronavirus. Around 95% of Americans are facing restricted activity.
This kind of economic breakdown will lead 7.8 billion people, almost half of the world’s population, into poverty. The situation is described as the most acute crisis since World War II. Economic experts are trying to make an assumption that nearly 195 million full-time workers are going to lose their jobs.
A developing country like India will face the worst scenario than any other recession occurred in earlier days. Even the recession period that occurred from December 2007 to June 2009, India faced the blow but not like the US. But, in this coronavirus pandemic period, mostly small and medium businesses will be heavily affected.
At the same time, labours who work on daily wages in India, are the worst affected. They have already started scaring to death by poverty and not by coronavirus – this is the ultimate truth. A large number of people involved in small to very small business will be shattered as they are now spending their bank deposits in the lockdown period, which they accumulated gradually throughout their lives.