The coronavirus outbreak continues to send shockwaves across the globaly economy. Despite the coronavirus pandemic, which is now a global health crisis, countries are trying to allay the negative impact of the global pandemic on the economy using monetary measures and stimulus packages.
But it is a fact that COVID-19 has changed everyone’s forecasts and priorities all over the globe.
Coronavirus outbreak hightlights
The coronavirus pandemic affects all countries both rich and poor As of today, COVID-19 has moved from China, which was the pandemic’s epicenter and the world’s second largest economy, to rich European countries.
The coronavirus outbreak threatens the U.S. economically, the world's biggest economy, and leaves it to play catch-up in the field of healthcare. So much so that the U.S. had to declare a national emergency.
Moreover, the largest economy in the world is experiencing a fluctuation it has not seen in recent years. In order to prevent these fluctuations, the Federal Reserve made an interest rate cut of 50 basis points at the FED. An additional interest rate cut is expected at the regular meeting this week. In addition, while the FED is ready to inject $ 1.5 trillion into the market during this period, Trump wants to put the market at ease by opening an $ 50 billion emergency fund.
Daily volatility in economic indicators, contraction in the economy and drop in oil prices is proving a nightmare for oil producing countries.
Due to the dependence of the world's largest oil producers Saudi Arabia and Russia on high yields from oil revenues, there are serious scenarios about possible drops in oil prices and the economic hardships these countries might face.
Due to uncertainties in the economy, the world's largest economies can see daily ups and downs, i.e. fluctuations. There is a forecast that we will experience a worse period than the 2008 global economic crisis, due to the fact that chances are that the pandemic will worsen are high, the possible severe contraction that will be experienced by economies worldwide and especially the forecast for first quarter economic growth.
For this reason, even though central banks take new steps to inject money into the market, they are struggling to seal their vulnerabilities against the virus by throwing money on the problem.
However, it is worth noting that once the enterprises are crushed under the huge debt burden and debts threaten economies, it is likely that large amounts of borrowing will drive many businesses to bankruptcy.
Mobility among countries is being restricted to prevent the spread of the virus and flight cancellations continue to increase with every passing day in many countries. While travel restrictions from African countries to the EU and the U.S. were imposed during times of previous pandemics, the reverse now is true now that EU countries are virus hotspots and African countries moved to cancel flights.
The bottom line
The coronavirus pandemic, which has taken the world by surprise and is now present in every country, seems to be a great threat to everyone, including great economic powerhouses. Now the main priority is to prevent the pandemic from worsening, to keep the economy afloat, and most importantly, to eliminate problems in meeting the needs of people.
It also needs to be said that the Ministry of Health’s Coronavirus Science Board studies help instill an atmosphere of confidence in Turkish society. It is also of note that it is easier to deal with such outbreaks using scientific explanations and studies.