HomeNewsThe Economic Threat of COVID-19

The Economic Threat of COVID-19

covid-19 economic threat

The Economic Threat of COVID-19

Apart from being a public health threat, the COVID-19 pandemic is also becoming increasingly an economic threat.

The coronavirus crisis has hit the business world at an unprecedented scale and speed and on the verge of triggering a deceleration of global annual growth to below 2.5 per cent.

In a televised addressed last month, Chinese President Xi Jinping said that the economy will also feel the virus’ wrath.

“It is unavoidable that the novel coronavirus epidemic will have a considerable impact on the economy and society”

The scenario according to UNCTAD

A preliminary scenario forecasts that the most badly affected economies in be oil-exporting countries, commodity exporters, as well as those with robust trade linkages to the initially shocked economies.

Richard Kozul-Wright, Director at the United Nations Conference on Trade and Development (UNCTAD) said that the economic ambiguity COVID-19 has initiated will likely cost the global economy $1 trillion in 2020.

“We envisage a slowdown in the global economy to under two per cent for this year, and that will probably cost in the order of $1 trillion, compared with what people were forecasting back in September.”

Launching the UNCTAD report, Kozul-Wright said that few countries will be likely left unharmed by the virus’ financial impacts.

He further advised governments to spend now to prevent a more catastrophic meltdown in the coming years.

ILO recommends

The International Labour Organization (ILO) has also released its preliminary assessment concerning the possible impacts of COVID-19 on the workforce.

“This is no longer only a global health crisis, it is also a major labour market and economic crisis that is having a huge impact on people”, said ILO Director-General Guy Ryder.

According to their assessment, the virus and the subsequent economic shocks will impact the world of work across three key dimensions:

  1. The number of jobs (both unemployment and underemployment)
  2. The quality of work (e.g. wages and access to social protection)
  3. Effects on specific groups who are more vulnerable to adverse labour market outcomes.

Figures indicate a substantial rise in global unemployment of between 5.3 million to 24.7 million.

ILO

Underemployment is also expected to increase on a large scale. The shock to labour demand is likely to translate into significant downward adjustments to wages and working hours.

ILO calls for protection of workers in the workplace; stimulation of the economy and employment and supporting of jobs and incomes – with each to include measures to extend social protections and support employee retention as well as financial and tax relief.

Share With:
Rate This Article
No Comments

Sorry, the comment form is closed at this time.