Long-Term Effects of the Coronavirus Epidemic on the Global Economy

The coronavirus outbreak has spread throughout the world. This outbreak, one of the greatest disasters facing humanity in the last century, has reached a level that will create social, political and economic crises globally.

The World Health Organization of the coronavirus (WHOThe measures taken by ) after the declaration of a global pandemic on March 11th also tightened. These measures to prevent the spread of the epidemic point to a serious crisis in terms of the global economy.

A large number of studies have so far been conducted on the economic dimensions of Covid-19 disease. Coronavirus outbreak As the debate continues over the consequences of moving forward in this way, some concrete data on the coronavirus puts some scenarios ahead of us regarding the consequences for the global economy. Some case studies in the past and so far obtained Statistics In line with the information, it is focused on two different scenarios at the economic level.

Optimistic scenario suggests a mid-term improvement is possible

This scenario predicts that April to May are critical for the course of the outbreak, and the number of cases will peak in Asian countries and begin to decline. In the United States and Europe, the number of cases continues to increase until mid-April. With local and national quarantine processes, reduced social isolation, and an increase in test numbers, the rate of spread of the outbreak is declining. The increase in temperatures in May also stops the spread of the virus, and an optimistic atmosphere prevails in May. With September, the virus is reactivated, but it does not undergo a mutation, and social and economic mobility begins in a controlled manner, thanks to knowledge and experience of Covid-19.

Despite such an optimistic picture, there cannot be a sharp drop in individual and institutional spending until the end of the second quarter. Consumption and employment are declining. In the third quarter, this continues to have an effect. Maintaining low interest rates, improvements in monetary policies during the first quarter, have a positive and limited impact. The economic loss in the two and third quarters cannot be prevented. The improvement in the economy in Europe and America is expected to occur only at the end of the fourth quarter, while Asia and Africa'There are no predictions yet.

The pessimistic scenario points to harsh and long-term negative effects

According to this scenario, the lack of widespread Covid-19 testing, lack of adequate social isolation, and lack of adequate public health protection due to these results deepen the effects of the crisis. In addition to this; Coronavirus outbreak The possibility of not being affected by summer temperatures is also taken into account. The possibility that the virus will undergo a mutation by the end of 2020 has also been considered another possibility that accompanies the pessimistic scenario.

Worldwide increase in death toll, Asian and African countries Coronavirus outbreak In this scenario, which involves the inability to manage well and the possibility of China having to take strict measures again, etc., Covid-19's bill to the global economy is also becoming heavy.

In this scenario, where small and medium-sized companies feel the crisis more deeply, consumer demands are projected to remain at a low level throughout the year. The thesis is that the aviation, travel, tourism sectors will face a serious crisis and, accordingly, year-round layoffs, bankruptcies will take place. However, despite all these negative conditions, it is not anticipated that banks will have a broad banking crisis thanks to their strong capital structure.

The pessimistic scenario predicts that the global economy will experience harsh impacts similar to the 2008 crisis, with shrinking in many countries. Additionally, it is reported that the start of economic recovery will find the second quarter of 2021.

We wish you a healthy day.