The economies are integrate with each other and nations need cooperation and coordination among themselves to overcome the economic crisis. Moreover, the nations should co-operate, coordinate and help each other to fight against Coronavirus. Subject to immediate relief from pandemic, the economic recovery from this fatal disease is only possible by 2021. It has already left severe impacts on the global economy and the countries face multiple difficulties to bring it back in a stable condition.

1. EDEN BUILDING TO STOCK EXCHANGE
Published: 12 July 2020
Impact of COVID-19 on global economy
https://dailyasianage.com/news/235102/impact-of-covid-19-on-global-economy
M S Siddiqui
COVID-19 pandemic is causing an unprecedented disruption to the global economy. It may
continue to paralyse economic activity around the world for unknown period. It has disturbed the
political, social, economic, religious and financial structures of the whole world. World’s topmost
economies such as the US, China, UK, Germany, France, Italy, Japan and many others are at
the verge of collapse.
The impact of COVID-19 is severe on the economic structure of the world because people are
not spending money resultantly businesses are not getting revenue. Therefore, most of the
businesses are shutting up shops. Most of the economists have already predicted about the
recession to happen because there is no surety and still no one knows that how for this
pandemic fall and how long the impact would be is still difficult to predict.
Most of the nations are going through recession and collapse of their economic structure that
points out the staggering conditions for them in this regard almost 80 countries have already
requested International Monetary Fund (IMF) for financial help. By this time, central banks
around the world have moved aggressively to cut interest rates and roll out massive stimulus
measures to help combat the impact of the outbreak that has rocked financial markets.
Bangladesh also offered subsidized interest rate for stimulus package for ailing business sectors
to rescue different business sectors and to come out of recession.
The pandemic is continue to remain the planet and can cost the global economy between $5.8tn
and $8.8tn, according to Asian Development Bank (ADB). There is a different view as well. ICC
in its quarterly News Bulletin (Jan-Mar’20) published that "It is still too early to properly assess
the extent of negative impact the virus will have on the world economy, since the situation is
evolving every day, economic estimates can only provide a magnitude of the impact."
IMF warned that it might push the global economy into the worst recession since the Great
Depression of the 1930s, and far worse than the one triggered by the Global Financial Crisis in
2008-09. As per IMF projections, the global economy would contract by 3.0 per cent in 2020,

2. while the World Bank thinks the global economy will decline by 2.1-3.9 per cent. The poorest
countries being the hardest hit.
UNCTAD's free market commodity price index (FMCPI), which measures the price movements of
primary commodities exported by developing economies, declined by a whopping 20 per cent in
March. This is the highest fall in commodity prices in recent history with the comparable figure
during the global financial crisis of 2008 when it was around 18 per cent. Most importantly, the
prices of crude oil became negative in April, which however recovered in May.
Coronavirus triggered a new type of recession that was different from other past recession. For
example, the Asian debt crisis of 1997 caused by the collapse of the Thai baht in July 1997,
which created panic that caused a region-wide financial crisis and economic recession in come
countries of Asia. The 2008 global financial crisis causing a recession due to loose monetary
policy, which created a bubble.
It was followed by subprime mortgages, weak regulatory structures, and high leverage in the
banking sector. The recession in Nigeria in 2016 caused by the fall in the price of crude oil,
balance of payment deficit, adoption of a fixed-float exchange rate regime, an increase in the
pump price of petrol, activities of pipeline vandals and infrastructure weaknesses. The recession
in Greece caused by the after-effect of the global financial crisis, structural weaknesses in the
Greek economy, and lack of monetary policy etc.
The pandemic is likely to cause an increase in global poverty for the first time since the 1990s.
According to a UNU-WIDER estimate, the number of people living in poverty could increase by
420–580 million. The World Bank estimates that the share of the population living in extreme
poverty will rise by 40-60 million.
The UN, however, predict the number in the range of 84–132 million. According to the Save the
Children and UNICEF, the COVID-19 pandemic could push an additional 86 million children into
household poverty by the end of 2020. For example, the Poverty rate in Bangladesh may rise to
40.9 per cent if Covid-19 causes 25 per cent fall in family incomes, according to the SANEM
estimate based on the BBS's income and expenditure survey data. Consequently, the successes
in alleviating poverty over the past two decades may fizzle out.
As per the Global Report on Food Crises, there were 135 million people in acute food insecurity
in low and middle-income countries last year. That figure could almost double to reach 265
million in 2020. The world could see the number of hungry people double in the aftermath of this
crisis, as per the World Food Programme (WFP).
Global trade contracted by 3.0 per cent in the first quarter of 2020. According to the UNCTAD,
the downturn would accelerate in the second quarter as well and the world trade would decline
by 27 per cent. It has echoed by the World Trade Organization (WTO), which has projected that
the world merchandise trade would shrink between 13 and 32 per cent in 2020.
There is another sector going to suffer is the job losses for migrant workers and the decline in
remittance flow to third world countries. The WB projections found that global remittance flows
would decline sharply by 20 per cent in 2020. Europe and Central Asia will experience the largest
fall of 27.5 per cent, followed by Sub-Saharan Africa (23.1 per cent), South Asia (22.1 per cent),
the Middle East and North Africa (19.6 per cent), Latin America and the Caribbean (19.3 per
cent), and East Asia and the Pacific (13 per cent).
About 94 per cent of the world’s employed workforce are living in countries with some sort of
workplace closure measures in place while around one-fifth of them live in countries that have
closed all workplaces apart from those deemed essential. The International Labour Organization
(ILO) survey found that more than one in six young people have stopped working since the onset
of the crisis.

3. Young people who remain employed experienced a 23 per cent cut in their working hours. The
decline in working hours around the world in the first quarter of 2020 is equivalent to
approximately 135 million full-time jobs losses, which would increase to 305 million in the second
quarter. The crisis is hitting young workforce, especially young women, more severely than any
other group.
The huge impact of COVID-19 on the world's biggest economy as the number of Americans
seeking unemployment benefits jumped by almost 3 million last week. Nearly a quarter of the US
workforce is now claiming some form of benefits.
UNCTAD predicted that the global FDI will shrink by 5-15 percent. Some study observed that FDI
flow expected to drop by about 35 per cent due to travel bans, disruption of international trade,
and wealth effects of declines in the stock prices of multinational companies.
The global stock market took a major hit with the core indexes Dow Jones, Nikkei, FTSE facing
the dismal declines in its history. The stock market severely damaged by COVID-19. For
example, the stock market of the United States is down about thirty percent. Besides, the most
affected sectors have become vulnerable such as tourism and travel-related industries, hotels,
restaurants, sports events, consumer electronics, financial markets, transportation, and overload
of health systems.
The economies are integrate with each other and nations need cooperation and coordination
among themselves to overcome the economic crisis. Moreover, the nations should co-operate,
coordinate and help each other to fight against Coronavirus. Subject to immediate relief from
pandemic, the economic recovery from this fatal disease is only possible by 2021. It has already
left severe impacts on the global economy and the countries face multiple difficulties to bring it
back in a stable condition.
The writer is a legal economist.
Email: mssiddiqui2035@gmail.com.