The likelihood of Coronavirus-induced economic recession and loss of jobs is rising

The global economy is reeling under the impact of the Coronavirus outbreak. While thousands of people are working from home, there are thousands more that have been rendered jobless.

Loss of employment and income

The United Nations (UN) fears as many as 25 million people around the world run the risk of losing employment due to the effect of the Coronavirus pandemic. However, the global body adds that a timely and internationally coordinated response can possibly cushion the impact. In its report, the UN estimates that between 8.8 million and 35 million people may be pushed into working poverty by the end of 2020, in the aftermath of the Coronavirus outbreak. Working poverty is a term used to define people who are employed but still live in poverty.

As a direct consequence of this mass unemployment, people will see a significant dip in their incomes. The UN estimates income losses of anywhere between $860 billion and $3.4 trillion by the end of 2020.

No more 'business as usual'

The impact of the COVID19 has brought global businesses to a screeching halt and the times ahead are going to be challenging for every nation.

The UN study reveals that the Coronavirus pandemic managed to wipe off $50 billion of manufacturing exports in a single month—February 2020. The losses—across industries—are likely to run into trillions, with Oxford Economics predicting global economy to suffer losses over $1tn in lost output.

Airlines will likely lose $29 billion to the Coronavirus this year, according to the International Air Transport Association. The manufacturing sector has come to a standstill, auto sales are down, oil prices have fallen, supply chains stand disrupted. And, it will be a long time before businesses can come on the right track.

Businesses are roiled under the impact of the pandemic and realize that it's not going be business as usual any further.

World Bank pledges support

The UNCTAD expects the European Union, the United States, and Japan to be the worst affected, with the impact on the developing nations being 'very, very intense'. France expects its economy to shrink 0.1% due to the pandemic.

To help individual nations fight the economic challenges due to the Coronavirus, sustain economies and help protect jobs, the World Bank has pledged support of $14 billion. This package aims to help nations strengthen their public health preparedness for disease containment, diagnosis, and treatment, as well as support the private sector.

Protecting economies and people

Globally, national governments are taking all the steps they can to protect their economies and people from the consequences of the pandemic. The Chinese government is trying to soften the economic blow by lowering the borrowing costs for businesses and individuals.

In India, the central government has set up a financial task force—the COVID19 Response Task Force—under the Finance Minister. The task force will reach out to all the stakeholders, seek their feedback and take decisions that can help overcome the ensuing economic crisis.

Contribute your bit to help contain the outbreak

As individuals, we can contribute our bit to help contain the outbreak. We must ensure that we observe social distancing, maintain adequate cleanliness, avoid crowds, stay home, and abide by the government advisories.

The article has been written by Neetu Katyal, Content and Marketing Consultant

She can be reached on LinkedIn.