Recession 2020-IMF has stated that due to the Coronavirus lockdown, Recession 2020 has already arrived. In fact, as per them, this Recession will be much bigger than the 2008 final crisis, not just that it will be the biggest crisis since the Great Depression.
Impact of corona virus-Economically(world economy)
|The slowdown means when the GDP growth rate is less.|
Not negative GDP is positive but still less than past years GDP
For EX.- There is a slowdown in India from the past few years due to inadequate government policies, but it didn’t lead to Recession.
|Most of the economist defines a recession when a country’s GDP rate goes in negative for more than two quarters that are described as Depression.|
|Depression is worse than Recession; it’s. It lasts for much longer. When a countries Growth rate is less than 10% for more than three years, then it is stated as Depression.|
In the past 150 years, the world has faced Depression only once in 1929.
The Great Depression of 1929. It lasted for more than ten years, and the Growth Rate of the world economy almost touched -15%. Most of the countries had an unemployment rate of 20%-25%.
2008(Great Recession) had only 1% GDP fall. Imagine The Great Depression of 1929 with -15% fall of the world economy. These two conditions cannot even be compared.
People are comparing today’s Recession with the 2008 Great Recession. Economist states Conditions will be worse in 2020. It is already visible in the data as:-
1. France’s economy enters a Recession with a drop of 6% in the first quarter. The worst performance of the GDP of France since world war 2.
2. German economy shrinks by nearly 10% in the 2nd quarter.
3. Labour class will be troubled and face problems. Will they survive.
In contrast to 2008, conditions are worse because people are not working due to lockdown. This time it is not possible as it is a complete lockdown. Many industries have tried to battle this by work from home, but many sectors cannot do it like sports, traveling, Entertainment, movies, artist, concerts, Manufacturing, etc.
Even Apple is not a trillion Dollar company anymore.
Restaurants had a hard hit by the virus as people are not visiting.
People are not getting paid, salaries are being deducted, hirings have been stopped, and people are also getting jobless
Some Big Companies
- Tesla has deducted the salary of all of its employees by 10%.
- Marriot’s world’s largest hotel company has deducted 50% of there senior executive’s salaries. Ten thousand workers have lost their temporary jobs.
- Norwegian airline has laid off its 90% of its staff members.
International Labour organization
ILO has predicted that 38% of the world’s workers will be laid off and face salary cuts.
Around 1 billion workers will face salary deduction will be fired from jobs.
Almost 2.7 billion workers are going to be affected directly and indirectly.
Will Small Bussiness’s Survive?
In India, Migrant workers are jobless. They don’t have money to earn or place to stay, and all this has led to stone-pelting demanding their salaries. One incident already took place in the surat.