The newspaper "foreign affairs" reported that the world economy has entered into a severe recession, and that the contraction will be sudden and severe due to the outbreak of the new Corona virus, expecting the effects to be effective for decades to come.
Most of the economic projections for 2020 were predicting a year of steady growth, if not increasing,. The update of the IMF forecast for January witnessed a rise in growth from 2.9 percent in 2019 to 3.3 percent in 2020, and there were many reasons for optimism, including the Trade Agreement. The "first stage" between China and the United States, and reducing the impact of Britain's exit from the European Union.
Then came the outbreak of the coronavirus, and caused a big shock to the global economy. The Organization for Economic Cooperation and Development recently cut its forecast for 2020 growth in half from 2.9% to 1.5%, and the International Monetary Fund indicated that it would issue a major adjustment soon.
But even this first round of reviews may have been very optimistic, as it included the widely held assumption that the recession in the first quarter would be immediately compensated in the second quarter.
Before the epidemic, many of the major economies, including Germany, Italy and Japan, were already ill equipped to handle even small external shocks, the newspaper said.
She emphasized that the sudden economic turmoil caused by the new coronavirus is highly destructive. For example, the travel industry, is an indication of the losses that hit the economic sectors.
Fears of infection on the aircraft and the closure of countries to its borders caused a major blow to the aviation sector. In response, airlines have reduced flights sharply because they are trying to maintain operational and financial viability, and have also laid off employees.
She noted that the measures taken by countries to combat the spread of the disease, such as closing borders, isolation and quarantine, are important to saving people, but they will make matters worse for the economy, and they will close one economic sector after another.
The newspaper pointed out that it will not be easy to restart a modern, interconnected global economy after the crisis has ended, and that the recovery of the economy will begin when health officials can assure people that the virus has been contained and that the immunity from the disease it causes has increased, stressing that the recovery will not be immediate but rather rapid .
The newspaper added that the correct response from governments, companies and individuals can limit the coming economic downturn, shorten its duration and contribute to a sharper, stronger and more sustainable recovery.
Just as the Great Depression that followed the 2008 global financial crisis led to the emergence of a new state of the economy represented by continued deteriorating growth and artificial financial stability, the newspaper expects that the crisis of the global economic terrain will change. It will accelerate the process of de-globalization, de-convergence, and redefine production and consumption worldwide.
It is noteworthy that the outbreak of the virus in more than 158 countries around the world, wounding about 218,000 people, and the death of about 8,810 others, led to the collapse of global exchanges, and the recording of billions of dollars in losses around the world.
Source website Al hora
