The unpredictable future of the world economy

Covid-19 has made almost all the economic activities stopped. No one really knows when the economy will start at full phase. While all the market analysts have agreed upon, there will be some negative impacts of Covid-19 on the world economy, but there are many different views on how dire it can be. Many market analysts and investors are optimistic that the demand will be normal in 6 to 9 months as they are expecting the discovery of a vaccine for Covid-19 soon. At least, they were expecting that the economic activities will be started partially by maintaining guidelines of social distancing soon. There were some experiments are going on, for example, some businesses like tried to open with one-fourth of their capacity with strict guidelines of social distancing under opening up the America campaign. In India, there was some loosening of strict guidelines after a month-long lockdown. Hence, these market analysts and investors want now to add share on a regular basis. But there are other views also. One of these views is even dire economic condition is too optimistic for the future of the world economy. According to the International Monetary Funds, many governments have to spend huge on their public and some governments will be unable to continue after some more months. This can lead to a serious situation. Furthermore, even if the vaccine comes to the market soon, the availability after production in a huge quantity will take time. Hence, many market analysts think that this pandemic will continue to affect the economy adversely for nearly 2 years. They cannot see any hope before that. Almost all the people are staying at home and they cannot go to work for two reasons. The first one is obviously to protect from Covid-19 and stop the spreading of the pandemic. Another reason has emerged now that is stopping the activities of manufacturing companies. That’s the short supply of production materials. Shipping across the world has almost stopped. All the Governments have decided to close their border or at least put restrictions on their border. Hence, production materials cannot be imported. For example, a big fraction of production materials of medicine and medical equipment are supplied by China to the US but at the present moment, it is not possible. The economy of many countries is facing troubles as exports have been stopped for more than a month and no one knows when it will be started. The unemployment is at the peak point even in the US. More and more people are entering into the poor zone daily in India while unemployment rates are also increasing. Many companies of India that had a high debt to equity ratio are now facing troubles to pay the loan.  Countries like India are facing a dilemma to which group to give priority. The government needs to feed and help people who are at financially crisis condition and on the other hand, they also need to spend to boost the share market. The share market of India has been fluctuating with hope and fear continuously. Last week Nifty had one of the best gained more than 5.90% but on Monday at 12.05 pm, Nifty is lowered by 4.91%.

 

Aryan Dev
Typical food expert. Hardcore beer specialist. Avid twitter fan. Total music trailblazer. Bacon fanatic. Tv maven. Infuriatingly humble webaholic.

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