Impacts of COVID-19 on global economy
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留学英文Essay代写 HThis paper is going to look at the impacts of Covid-19 on the economy discussing its spillover into major sectors of the global economy.
Impacts of COVID-19 on global economy 留学英文Essay代写
According to Ozili, (2020), in 2019, many people were anxious about the US-China trade war, but the IMF had projected that there would be a global growth of 3.4%. However, this growth was never to materialize as Covid-19 came into existence and changed the entire scope. This paper is going to look at the impacts of Covid-19 on the economy discussing its spillover into major sectors of the global economy. Firstly the paper will briefly discuss the spread of the virus, some of the measures that were implemented by governments around the world like social distancing and its impacts on economic activities. The paper will also discuss spillovers in major sectors of the global economy including the aviation industry, oil-dependent countries, the hospitality industry, and the entertainment industry.
The spread of Covid-19
Nee and Audrey, (2020), provides real time data in the graph shown below.
Source: (Nee & Audrey , 2020)
Corona Virus was first reported in Wuhan, and by April 2020, it had spread to more than 180 countries. According to Farazad, (2020), by April 2020, more than 930, 000 infections had been reported while 47, 000 had succumbed. Graph 2 details the reported cases of Covid 19 in the United States. As the graph shows, the first coronavirus case was reported on January 21st. however, the number continued to grow in march especially when the health care authorities expanded their testing activities into various regions of the United States (Nee & Audrey, CNBC, 2020). By April, the USA was having the highest number of infections even though the number was an estimated one. To stop the spread of Coronavirus in the United States, the government passed policies that implemented lockdown while the president extended some guidelines that were extended to promote social distancing.
Source: (Nee & Audrey , 2020)
Global spillover 留学英文Essay代写
Many governments around the world desired that covid-19 will be localized in China only. However, the virus spread to different parts of the world through the people moving from one region to another. Lockdown scenarios were witnessed globally as people were encouraged to stay at home and stop the spread of the virus. According to Nee and Audrey, (CNBC, 2020), these actions are currently being felt severely in many sectors of the economy. For example, the travel bans affected the aviation industry, sporting event cancellations had a negative impact on the sports industry while mass gatherings were stopped and negatively impacted the entertainment industry.
Impacts of Covid-19 on the Aviation Industry
According to Martin, et al, (2020), more restrictions were put in place in many countries around the world to stop the spread of Covid-19. As a result, there were reduced commercial flights because they fell from 100, 000 in January and February to 78, 000 in march 2020. By April 2020, there were only 29, 400 commercial flights. This led to an estimated plunge in passenger revenue for airlines of up to $314 billion (55% drop) as shown in the graph below.
Source: (Farazad, 2020)
Spillover to oil dependent countries 留学英文Essay代写
According to Shahjahan, (2020), in the early months of 2020, the oil price fell due to the oil price war that was being experienced between Russia and Saudi Arabia. The situation was made worse when the coronavirus started to spread in different parts of the world. For example, according to Farazad, (2020), the travel restrictions led to a reduction of people traveling and this led to a drop in demand for aviation fuel, coal, and energy products. A drop in oil demand resulted in a decline in sales and oil prices. While various oil import countries like japan and Germany enjoyed low oil prices, it had a negative impact on economies like Arabia and Venezuela that rely on oil exports to run their budgets. The graph below details how the oil price fall from March –April 2020.
Source: (Our World Data , 2020)
The drop in oil price led to the loss of oil revenue to oil-dependent countries and its impacts were severe. According to Shahjahan, (2020), low oil revenue led to increased oil-exporting countries’ account deficits and therefore worsened the balance of payment and their national budgets were affected. These deficits in their annual budgets forced the oil dependant countries to seek foreign loans or develop new friendly budgets. Martin, et al, (2020), also argue that as a result of travel restrictions, many countries also suspended tourism travels, work visas, and immigrant visas. Many countries also imposed all forms on inward and outward travel and shut down its major airports. Many passengers also canceled their tickets leading to a reduction in demand for travel.
Spillover to the hospitality industry 留学英文Essay代写
The graph below shows how the hospitality industry was affected during the Covid-19 pandemic when the government announced the “stay at home policy” and social distancing. Ozili, (2020), states that these policies resulted in shutdown of cities to control the virus leading to many restaurants and hotels to lock down because of lack of business. The graph below shows that since the first case of the virus was confirmed in France, the hotel industry in the region experienced a damaging impact. By February, the number of revenues per hotel room was still small. Lockdowns and restricted travel policies resulted in negative results across Europe. For example, from the information in the graph, Italy experienced an 85% drop in Revpar, while Greece had a 52.4% drop.
Source: (Farazad, 2020)
Spillover to the entertainment industry
According to Ozili, (2020), the global film industry has incurred more than a $5billion loss due to the coronavirus Pandemic. This is because many movies were postponed and this meant that their businesses and cinema were not going to function. More than 120, 000 entertainment industry jobs were lost. From the graph below, 6.6 million people have been unemployed as a result of Covid-19. 留学英文Essay代写
While many companies in different industries were letting their employees go, there were 222, 000 employees that lost their jobs in March 2020 and 56, 000 in February (Shahjahan, 2020). A significant loss of jobs was witnessed in the entertainment industry. This cut is attributed to the closure of theaters, concerts, and cinemas due to the social distancing and stay at home policies to regulate the spread of Covid-19. The entertainment industry also comprises amusement parks and tourist sites which were most shuttered by the pandemic. Martin, et al, (2020), also argues that the unemployment levels rose unprecedented.
source :(Buchholz, 2020)
Conclusion
This paper has analyzed the coronavirus outbreak and how it spilled over to the world economy that has resulted in a global recession that is currently being felt. Many policies were passed by governments to control the spread of Covid-19 and in the long run, negatively impacted the global economy. Social distancing and lockdown restrictions are policies which triggered the recession because it hurt the economy as it reduced general economic activities that had negative impacts on stock prices. Major areas that the pandemic affected include the entertainment industry, oil dependant countries, the aviation industry, and the hospitality industry.
References
Our World Data . (2020, October 25). Retrieved October 25, 2020, from https://ourworldindata.org/coronavirus.
Buchholz, K. (2020, April 3). Statistica . Retrieved October 25, 2020, from https://www.statista.com/chart/21341/jobs-cut-us-monthy-report/.
Farazad, K. (2020, March 25). Hospitality Net . Retrieved October 25, 2020, from https://www.hospitalitynet.org/opinion/4097757.html.
Martin, A., Markhvida,, M., Hallegatte, S., & Walsh , B. (2020). Socio-Economic Impacts of COVID-19 on Household Consumption and Poverty. EconDisCliCha , 453–479.
Nee, Y. (2020, May 5). CNBC. Retrieved October 25, 2020, from https://www.cnbc.com/2020/05/06/coronavirus-pandemics-impact-on-travel-tourism-in-5-charts.html.
Nee, Y., & Audrey , C. (2020, April 1). CNBC. Retrieved October 25, 2020, from https://www.cnbc.com/2020/04/01/charts-show-the-coronavirus-spike-in-us-italy-and-spain.html.
Ozili, P. (2020). Spillover of Covid-19 . SSRN Electronic Journal, 1-28.
Shahjahan, M. (2020). Impact of COVID-19 on global economy. Eden Building to Stock Exchange , 222-228.
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