Coronavirus is a dangerous disease that affects tens of thousands of people worldwide every day. The infection has spread around the planet but attitudes toward it vary from state to state. The pandemic has had an enormous impact not only on people’s lives but also on the world economy and has added a high element of uncertainty. It has caused direct damage to the world’s economies through morbidity and mortality and indirect damage through quarantine restrictions on specific sectors (Ozili and Thankom). Countries are trying to cope with the issue and its adverse effects by taking radical measures, including financial interventions, to stabilize markets. The coronavirus pandemic is not only a security problem but also a socio-economic one that should be addressed through various mechanisms.
The risks associated with the spread of the coronavirus can negatively impact various aspects of the economy. These include declines in forecasts and production activity, reductions in the value of oil, stock market problems, falls in global tourism, and many others. The cumulative effect of negative factors increases the possibility and destructiveness of the crisis. At the same time, Kristalina Georgieva, Managing Director of the International Monetary Fund, said that the current economy is prepared for a problem and can handle it (The IMF’s Response). Large-scale industrial development and high employment rates among the working-age population helped countries fight against the pandemic. However, many experts believe that COVID-19 will deprive the world economy of trillions of dollars over the next few years. The fall could be swift, but it will take a long time to recover. The state of the U.S. economy is essential to all other countries because it accounts for almost a quarter of global Gross domestic product (Silver). For this reason, the global economic recovery depends mainly on how America handles it.
The pandemic has turned the economy around in the United States as well. According to Fed Chairman Jerome Powell, the U.S. economic recovery from the coronavirus pandemic is approaching the threshold beyond which support measures can be withdrawn (Beams). However, the sudden spread of a new strain of coronavirus poses unknown risks. These could include higher inflation on durable goods, growing unemployment, and falling investment in housing. Extended periods of unemployment can create long-term damage to people’s lives and well-being and reduce the economy’s productive capacity. The lack of a universal health care system in the U.S. has already been criticized in the days of the crisis. This problem will be waiting to be solved if the country wants to become more immune from such pandemics in the future. Accordingly, the coronavirus continues to threaten U.S. economic activity, and all possible adequate measures to reduce it should continue to be taken.
The situation occurring in the global economy in 2020 can be defined as the most unpredictable in the 21st century. The pandemic’s devastating social and economic consequences will soon be acutely felt almost everywhere. It will be possible to fully assess the degree of the destructiveness of the new factors negatively affecting the economy. Today, it can be talked about the powerful impact that has paralyzed international trade and put into question the further development of globalization. The U.S. is a critical player in the economic sphere. The recovery of this state is directly linked to the recovery of the economy as a whole. The situation can only be reliably and sustainably improved if appropriate measures are taken not only economically but also socially, climatically, and politically.
Works Cited
Beams, Nick. “Fed Chair Jerome Powell Treads a Fine Line in Jackson Hole Speech.”World Socialist Web Site, 2021, Web.
Silver, Caleb. “The Top 25 Economies in the World.”Investopedia, 2020, Web.
“The IMF’s Response to COVID-19.” International Monetary Fund, 2021, Web.
Ozili, Peterson K., and Thankom Arun. “Spillover of COVID-19: Impact on the Global Economy.” SSRN, 2020. Web.