16 Mar The Coronavirus (COVID-19) escalation and the global economy
As the COVID-19 virus continues to spread at a global scale, the aftermath of Coronavirus could cut global economic growth in half and plunge countries into recession in 2020. In a recent article published by The Guardian, it’s stated that the Organisation for Economic Cooperation and Development (OECD) said that global GDP growth could plummet to as little as 1.5% almost half the 2.9% forecasted rate before the outbreak. The professional team at GCS Malta outline the issue in the following article.
The result of all of this could be the “gravest threat” to the global economy since the financial crisis. It has been mentioned that the economies of Japan and the eurozone could face recession this year.
Taking a look at China’s scenario, it serves as a good case study on how COVID-19 could affect our economy. Travel, tourism and trade are already being affected and may have to shut down if workers are not able to get to work as they are sick. Without workers, businesses will produce less and workers who aren’t working will buy less. This leads to lower profits or even losses. Most businesses will have to be more cautious when it comes to investments and hiring.
The Bloomberg Economics model foresight a recession over the next year at 52%, the highest since 2009, as stated in Bloomberg’s article.
The EU economy spokesman, Paolo Gentiloni, said “the idea of a V-shaped recovery, returning quickly to growth, can’t be taken for granted and could prove optimistic. ” He emphasized that EU rules allowed individual countries to respond to the crisis and they should act quickly to maintain confidence.
The OECD called for greater support for the healthcare systems and workers and for nations to protect the incomes of their most vulnerable social groups and businesses.
At GCS Malta, we realise the extent of the coronavirus and urge everyone to #staysafe. We invite everyone to work together in these times and to respect one another. GCS Malta will continue to work as usual behind closed doors to safeguard our employees.