CORONA VIRUS GETS REAL, AND THE GLOBAL ECONOMY REACTS.
Dr Celine Gounder a specialist in infectious disease and Gillian Tett who works in the editorial board in us was invited to the on-point station to discuss if from the past pandemics there are lessons that can be applied to this novel coronavirus and the effects that this pandemic has on the global economy. Gillian was to explain the economic impact of this pandemic while Gillian was to tell how we can be safe and ways of preventing fear from the growing amount the US civilians.
The global economy has also been affected by this pandemic. This is because there is a sense of panic that is experienced globally. Since the emergence of this, the stock market has been volatile. Impacts of this pandemic are felt because even the Federal Reserve reduced interest rates by approximately half a percentage. This move was vital as it was to cool the investors and help in stabilizing the market. Despite all these efforts stocks dropped a few hours later
Gillian says that globally some tension exists as the coronavirus has really negatively affected the market. There is tension in the market as the investors fear that the government may be knowing something that they don’t, and this creates fear for them. The coronavirus has also been able to show how well prepare our governments are especially us government in helping the vulnarable.As during this epidemic the vulnerable will need help from the government as they do not have disposable income.
All sectors have been affected by this pandemic and they are not really affected due to the virus itself but due to the measures that the government is putting to stop the spread such as lock down. Industries such as the pharmaceutical industries have warned that they may not be able to supply enough of the medicine needed. The fact that there may be banned travels brings worries as some of the essential goods may not be transported. Therefore it brings out the question of whether domestic localized production is protected. There is need to protect this localized production as it would help during such times.
This pandemic has also shown that the global economy is dependent on few sectors such factories and industries which if they close down can hugely affect the global market. It has also shown that the worldwide supply chain is held by a few knots among them being china as it produces a lot. It has also shown that china’s footprint is expanding and china’s impact on the global economy has been felt during this time.
Then we have been experiencing a continuous growth in the economy market for the last ten years. The Federal Reserve in an effort to protect the market has cut the interest rates by half a percentage point. This move is intend to calm the investors .It is also intended to make sure that the borrowing is made cheaper and it also helps in in improving the or boosting the prices of assets. The worry comes in that if the Federal Reserve keeps on cutting the rates in an effort to curb economic crises due to the pandemic the hard earned ten years economy may go down so low and this will affect the global market.
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