The world economy already is hindered by the greatest recession in 2020 after the severe impact of the coronavirus pandemic. According to the International Monetary Fund, the lockdown due to COVID 19 has will keep the World economy struggling for upcoming years. Till now due to major lockdown in several countries, the GDP has already dropped to 3 percent after the epidemic has not only frozen the present economical condition.
Onset of the COVID-19 pandemic showed GDP improvement
COVID-19 onset started in January which was showing a sign of improvement to more than 155 countries but as the widespread of the disease throughout the world till March it showed the decline in the economy worldwide. This lockdown at a time throughout has also shattered the USA with the death toll of more than 40,000 cases. Total active cases have risen to more than 767189 and the epicenter of coronavirus is now the New York City. Despite total lockdown, the state has active cases of more than 5 percent of the total cases of the country. This pandemic has led to pulling down the healthcare administration of New York, after urging for financial aid White House has passed a bill of $2 trillion for different aids including the medical supports and equipment required for the pandemic.
IMF managing director Georgieva mentioned the worst situation due to the coronavirus pandemic which has already called for challenges for policymakers specifically surrounding the emerging market and the developing economies. It was beginning of this year when the economy was slightly into the recovery but the sudden steep fall has caused to severe recession.
The world economy will be in trouble for a long time….
To understand the trouble caused to the world economy let us compare the market of the last decline to 2008 with the 2020 crisis. In 2008 in the market Nifty has blown out to 65 percent while it took months to hit the economical crisis but it took 18 days Dow to drop 32 percent. The main cause of the concern in this world economic recession is the uncertainty widespread of the disease that has not pulled any kind of assurance to end the pandemic in a certain period.
Already the major pandemic outbreak has stricken Spain and Italy that come after the US with the epicenter after Wuhan in China. Comparing to the last recession this recession is uncertain and that predicts for an unstable economic condition for the upcoming years unless the pandemic is entirely under control.
Stock market 2020 has shown the repercussions due to the disease and lockdown worldwide, in the US. In 2008 a prediction was generalized to understand the span required to overcome the recession but this pandemic has out an hold on the prominent growth within a certain period, it stands unpredictable.
During the world economy downfall after 2008, the S&P 500 has seen a steep fall of 12.5 percent and a recent 4 percent. The effective period for the investors to grab and invest in companies FMCG, pharma and a few select companies that get provide the best return in the future.