Impact of COVID-19 on the world

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In recent weeks, we have seen the significant economic impact of the coronavirus on financial markets and vulnerable industries such as manufacturing, tourism, hospitality and travel. Travel and tourism account for 10% of the global GDP and 50 million jobs are at risk worldwide. Global tourism, travel and hospitality companies closing down affects SMEs globally. This, in turn, affects many people, typically the least well-paid and those self-employed or working in informal environments in the gig economy or in part-time work with zero-hours contracts. Some governments have announced economic measures to safeguard jobs, guarantee wages and support the self-employed, but there is a lack of clarity in many countries about how these measures will be implemented and how people will manage a loss of income in the short-term.

The global economy could shrink by up to one per cent in 2020 due to the coronavirus pandemic, a reversal from the previous forecast of 2.5 per cent growth, the United Nations (UN) said, warning that it may contract even further if restrictions on the economic activities are extended without adequate fiscal responses.

The analysis by the UN Department of Economic and Social Affairs (DESA) said the Covid-19 pandemic is disrupting global supply chains and international trade. With nearly 100 countries closing national borders during the past month, the movement of people and tourism flows have come to a screeching halt.

“Millions of workers in these countries are facing the bleak prospect of losing their jobs. Governments are considering and rolling out large stimulus packages to avert a sharp downturn of their economies which could potentially plunge the global economy into a deep recession. In the worst-case scenario, the world economy could contract by 0.9 per cent in 2020,” the DESA said, adding that the world economy had contracted by 1.7 per cent during the global financial crisis in 2009.

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Social distancing and lockdowns have also prompted altruistic behaviours, in part because of a sense that “we’re all in this together”. Many people report being bored or concerned about putting on weight; others have discovered a slower pace of life and by not going out and socializing have found more time for family, others and even their pets.

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Messages about what businesses are doing for their employees and in their communities is also important. Some companies are helping schoolchildren from vulnerable families who can no longer get a school meal; others are providing public health messages about effective handwashing. Even CEOs can show they are working from home and self-isolating, while still being effective in their leadership.

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