The Economic Repercussions of COVID-19

Covid-19: An Economic Catastrophe

On mid-December 2019 a novel type of coronavirus called Covid-19 was believed to surge from a “wet market” in the capital of Hubei province in China, the city of Wuhan, which has a population larger than London’s, was the location or the epicenter of the outbreak that everyone followed closely on the news, yet no one would have ever imagined that all around the world, people would have found themselves quarantined amid coronavirus concerns which were no longer focused on China.

As of March 18th, there were a total of 217.436 cases

reported all over the globe with a number of 8.919 deaths confirmed. Clear proof of how highly contagious the enormous pandemic which has by now impacted 172 countries is. A few weeks ago, Europeans especifically, Italians were not worrying about their economy collapsing. A few weeks ago they were not picturing their tourism having a massive decrease. A few weeks ago, they were not concerned about their businesses nor were they worried about their stocks or wondering if they had enough food for a quarantine no one was prepared for.

Italy was caught by surprise, Italy was caught unprepared, Italy was caught with no mercy. We all know that we need to stay home, we've all been given a bunch of recommendations that honestly and forgive the boldness, seem useless. We've all been told to wash our hands and avoid social gatherings, but we have not talked enough about the repercussions that the virus will most likely have on worldwide economies. The truth is that the world is not pink color and even when the disease is contained, consequences will fall like debris on our shoulders. Currently in most of the already reported case holder countries, everyone has been told to stay home but this is something that the world of money can absolutely not condone.

Consumerism keep world markets alive, it keeps economic stability, and enlarges the economy's growth rates by increasing production of manufacturers which lead to more employment opportunities. Notably, not every aspect of consumerism has a good aftereffect as it also slams the environment by depleting natural resources and polluting the Earth.

In a quarantined society, fear keeps people from going out

unnecessarily, Supermarkets are probably the only businesses making profit out of people’s need to quarantine. If you are told to stay home, that means you will not go to the movies with your friends nor will you be buying clothes or makeup any time soon, you will not be allowed to just hang out with your family at a restaurant and you most definitely will not be going to the gym where you could catch some still not well known viruses.

What does all of this mean? you may wonder, let me help you out a bit. Large chain restaurants, shops, gyms, thematic parks and many different sorts of businesses around the world have been forced to close and lose millions of dollars while the virus containment becomes a reality, they are currently trying to figure out what to do with their employees because if they were to fire them or withheld their salaries whilst closed, these people would not be able to maintain themselves as they will not be in a position to afford basic needs nor would they be capable to comply with debts and responsibilities but the bigger issue takes place when the stability of a small family owned business is compromised as they do not have the income nor insurance of large and well established companies.

Some examples of possible and already existing outcomes of the virus’ impact on the global economy can be seen on the stock market, which In the second week of March saw its biggest one day decline since 1987. The markets overall have seen major swings and continued volatility. According to the Organisation for Economic Cooperation and Development (OECD) The world's economy could grow at its slowest rate since 2009 this year due to the coronavirus outbreak. Many other issues affect the economy, one of the biggest ones could be for example the catastrophical repercussion the virus is already presenting in worldwide health systems that certainly do not have the resources to treat patients at the current rate of infection, much less would they treat 70% of the world’s population all at once. It is believed that the virus could infect that percentage of people around the globe but that's another story.

Finally, what to say about Colombian case when even the money from the pensions is gonna be taken as a 10 year loan in order to avoid bankers to be in illiquity? This is something to be worried because the sector that really needs quick and effective help right now is the health, which is gonna be overwhelmed very soon.

By: Natalia Del Castillo, Step 10.