Effects of Covid-19 on Businesses and World Economy
Covid-19 widely known as coronavirus was a pitfall the world was not looking forward to at all but had to face anyway. Soon after the first case of coronavirus in Wuhan city of China, the world had to prepare for the worst. It didn’t take long to reach the other parts of the world and with a blink of an eye; every country was encapsulated by the virus.
Nobody expected 2020 to be a year where people would just stay at home and stock up toilet paper rolls instead they had plans for growth and achievements which they couldn’t get. With each year, expectations tend to get higher and higher but 2020 pushed the world back to at least a couple of years.
Countries were forced to put their resources into stopping the spread of coronavirus when they had plans to boost their national economies.
Entrepreneurs and Business holders had plans to expand their business and increase the profits but they were limited to their homes with little to no knowledge of when will things come to normal.
Covid-19 surely took a toll on the business sector which resulted in a swaying world economy. According to the reports collected by student assignment help UAE, IMF stated that in 2020 the global economy shrunk by 4.4% which is said to be the worst since the 1930s Great depression. However, the country where it all started from (China) had a growth of 2.3% in its economy and it is the only country that saw major growth.
Most of the businesses were severely affected because of the coronavirus and had to face financial issues, decrease in demand, supply chain disruption, and major issues with reduced sales and profits. Also, the majority of businesses were not prepared to handle such a situation and are even now incapable of handling it.
Because there was a worldwide lockdown business had no scope to grow and some of them, unfortunately, had to shut down permanently. If we take a look at the market, we will see that the pandemic had its negative impacts but the major impact it had was on the minor and small businesses because they were lacking the resources needed for a situation like this.
Small businesses highly rely on day-to-day transactions and due to the lockdown it was not possible and they deprived of customers which lead to the complete shutdown for some of them.
Unemployment Due to Covid-19
Due to the pandemic, millions of people lost their jobs and the unemployment rate increased greatly. Almost 15million people were left unemployed, deeply affecting the global economy.
Amongst everything, there was a rise in online shopping because people couldn’t leave their homes which is why businesses with digital sales as a part of their marketing models saw tremendous growth, and their revenues were growing five times faster during the pandemic as compared to before it.
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Some reports suggest that the world may take years to completely recover from the economic losses due to Covid-19. Governments all around the world are trying their best to recover and sustain their country’s economy but the losses are greater than anticipated. The supply and demand side of every sector had to bear the shocks because due to lockdown, uncertain duration magnitudes, little to no investment, and spreading infections, became the main cause of the disruption.
A New Hope!
Despite all the hardships this world saw in 2020, there is hope for betterment in the future. Thousands of executives from all around the world are optimistic and suggest that the global economy will hopefully see improvement in the next six months. The path to stability will surely be difficult for businesses and the global economy and it might take a lot of time to generate the pace for growth but things will come back to normal or even become better than before.
Authors Bio: Willy Beamen, contributor for business with 15 years of experience from Sydney, Australia. My work is mostly focused on helping small business owners and local startups to get off the ground and expand.