Covid-19 and the economic crisis in the future

by Nischal Upreti

With the confirmed cases of “COVID-19” skyrocketing to 4 million globally and with the quarantine measures spread across the globe, restricting movement and commerce, it’s a no surprise that economics has felt a massive downgrade all over the world since the start of the pandemic. With the unemployment rates rising all-round, stock markets being pounded, industrial companies retail sales falling down to 10-11%, and oil prices falling off the cliffs, it’s no surprise that this pandemic is worsening the financial and economic structures globally. Although all of this is in the present scenario, let’s look at what will happen in the future and beyond.

The overall economic impact for the next few months will partly depend on what the governments of the countries will do, the more government will try to keep people in their homes to stop the spread of the diseases, the more economic crash will occur around the world. If the pandemic takes longer than the prediction from the scientists to disappear, the economies around the world will see a massive downfall in the GDP along with the mass inflation. Besides, the small and medium sector industries will face a massive disaster as they depend on their sales to run the industries and pay their workers, which brings us to the conclusion that a lot of small sectors and the medium sector will go out of business creating mass unemployment and spiraling into an economic depression as we have seen in past. This goes the same way for the large sector industries if they don’t have any means of financial backups. The one that is going to benefit from the pandemic will be the big pharmacy companies and technology companies (as we saw in recent cases of an app like “zoom”) so they wouldn’t have any economic crisis in the coming future. Meanwhile, the developing countries or under-developed countries will suffer a massive debt from bigger countries in order to run their economy in the future. As for the people depending on daily and monthly wages for their living, they will have a problem finding jobs in the near future because of closing of small and medium scale industries.

It is no surprise that the countries and industries in the future will have to depend on each other for maintaining the economy. So, basically what we can see is small countries and industries drowning in debts, a rise in prices of the products, unemployment being a major problem all over the world and so on. From an economic perspective, there are four possible futures: a descent into barbarism, robust state capitalism, radical state socialism, and a transformation into a big society built on mutual aid.

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