Global economy in times of pandemic

The COVID epidemic has made the global economy plunge into recession. The recession can only be overcome if effective Post-COVID economic stimulus plans are envisioned and implemented on an ad hoc basis. Most countries in the world are now witnessing the worst recession since the Great Depression of 1930. Many nations have had to resort to forced lockdowns to prevent and control the spread of corona. This has forced millions of people to stay indoors. The nations implemented the lock-down by suspending almost all economic activities, including commercial and industrial activities. According to the International Monetary Fund (IMF), the global economy is fated to shrink by more than three percent in 2020-21. Growth in many countries (GDP) is expected to slow down by 2020, as indicated by the IMF.

The International Monetary Fund (IMF) had predicted that global economic growth would slow to minus 3 percent by 2020, worse than what the global financial crisis of 2009 had done. But as some countries lifted lock-down restrictions and began to revive their markets, the general economy was able to recover from a great slump. With the COVID going "viral" in 2020, even the economy of developed countries suffered a marked collapse. The IMF forecasts that the economies of the US, Japan, the UK, Germany, France, Italy and Spain will shrink by 5.9 per cent, 5.2 per cent, 6.5 per cent, 7 per cent, 7.2 per cent, 9.1 per cent and 8 per cent, respectively. At least for a short period, the prediction proved true. Reuters reports that millions of people, even in the US, have been seeking unemployment benefits as the economy has shrunk and economic growth has stagnated following the COVID epidemic.

China's GDP fell by 36.6 percent in the first quarter of 2020. But in South Korea, it was only 5.5 percent. COVID's impact on the South Korean economy is relatively smaller, as trade and economic activity has not completely come to a standstill there. This is because, instead of imposing a lockdown, South Korea adopted restrictions that increased the number of inspections and tightened the quarantine. The World Economic Forum (WEF) has called on the government to support small, medium, and micro enterprises as well as large-scale commercial enterprises in order to maintain economic stability and employment stability during the epidemic. Almost all the developed countries in the world have announced such economic packages as per the guidelines. In India, the Finance Minister Nirmala Sitharaman has presented the 'Atmanirbhar Bharat Abhiyan' package. It created a great stir in the economy. Ten per cent of GDP was initially earmarked for India's economic stimulus package. COVID's second wave is expected to intensify as the economy resumes operations and steps are taken to bring the economy back to normal, and a third wave is predicted to pose yet another threat.

This suggests that for the world economy to recover in these turbulent times, it is still necessary to effectively implement monetary and economic stimulus plans and enable their coordination through communication. Most economists predict that the impact of the second wave will not be as severe in the coming days as it was last year. Crisil, a rating agency, said the impact of the second wave on industrial activity would be small compared to the economic devastation of 2020. Nomura, a Japanese brokerage firm, says that despite the slowdown in business, it had only a limited impact on the economy. Experts point out that while the impact of the second wave of COVID will slow down India's economic growth, it will be still do better compared to last year’s performance. This gives us great hope.