The US isn't far behind with a predicted 30% decrease in this year's second quarter. China's economy has gone through a decrease of 6.8% - the first decrease in the country's economy since it started recording quarterly figures in 1992 - which has had a major impact on the global economy because of China's status as a major producer of goods and goods used to make other goods (they produce 60% of the world's shoes as an example).
Therefore, it is easy to see why the effects are to be so dire when the volume of industries affected by the virus is considered. To name a few; the travel and tourism industry is being devastated due to travel bans and the public rightly fearing to travel while manufacturing companies all over the world such as Apple and Nike have admitted to be feeling the negative effects of the virus. Yet, this represents a small portion of the small businesses across the globe that are being affected, such as the 25% of small businesses in UK closing or stopping trade and the 44% of businesses in UK reporting a lower turnovers.
But why is this important? The Bank of England was forced to, like many other countries, cut interest rates because of investors ditching assets in many countries. After two cut in one week the interest rates fell from 0.5% to 0.25% to 0.1% - the lowest ever in the Bank of England's 325-year history - which was announced along with a package of measures to support businesses suffering economic damage. Not only has there been a coronavirus pandemic, but one of unemployment, an example being the US where they went from record highs in employment to record highs by increasing from 200,000 to 6.6 million unemployment claims in just one week. There have also been problems with supply and demand of products such oil and agricultural goods due to disruptions of trade from countries like China. A significant shortage has been that of medicine, which has possibly occurred due to the increase in demand and the inability to increase the supply due to the current market.
In conclusion, we can see that the economic effects will be yet another lasting memory of the virus. Only predictions can be made about how grim future consequences will be. Yet, the more stocks and economies go down and the more people become unemployed, we must not stop trying and we must look to the future. It is still predicted that the world will rebound from the recession and still experience economic growth this year. We cannot save every job, we cannot save every business, we cannot save every share, but we can rebound and make the most of what we've got.
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