Effects of Covid-19 on the Global and United States Economy
The new covid-19 disease has affected the globe adversely since it has disrupted the normal activities of all people. Since the disease is spread when people meet in huge crowds, many businesses and industries have been closed down. Many people have also lost their jobs, and this has led to economic difficulties among people all over the world. There have been restrictions on movements and lockdown, thus conducting businesses has become difficult and the economy is disrupted altogether. This paper will discuss the effects of covid-19 on the United States and global economy.
The lockdowns and quarantines have affected the economy of the United States, and the stock markets have been affected greatly. Many businesses have been closed down, and this has led to many people losing their jobs (Baldwin Richard and Eiichi). The loss of many jobs may lead to a recession in the economy, and this would affect many people greatly. The covid-19 pandemic has affected many industries, and the largest affected is the consumption industry. The consumption industry contributes to about seventy percent of the country’s Gross Domestic Product. the consumption level has reduced greatly since many businesses have closed down and the households has hold off on major purchases as they want to safe their finances and jobs.
The investments also make up for about twenty percent of the Gross Domestic Product in the United States, and due to lockdown and restrictions in movements, the rate of investments have been affected greatly. Many investors fear investing their money in businesses, and thus the economy is being affected greatly. Without investors, the economy is being affected since the future is unpredictable and the cost of covid-19 would be very costly. The entertainment, restraints, arts, and theatres have been affected significantly by the pandemic (Baldwin Richard and Eiichi). The entertainment sectors contributes to about 4.2 percent to the Country’s GDP and since the business no longer open up due to restrictions on movement and lockdown. Thus the economy of the United States loses the incomes earned from the entertainment sectors. The manufacturing sector makes to about eleven percent of the GDP, and due to closure of boundaries, the industries have been closed down since it is now difficult to acquire raw materials from other countries. Many businesses have closed down, and thus many people in the united states have lost their jobs while others have been laid off.
The world at large has been affected enormously by Covid-19, and thus many people across the world are suffering economically (Fernandes Nuno). Restrictions in movements and lockdowns have made it difficult to conduct international trade, and therefore, those countries and people that largely depended on the trade are experiencing economic hardships. The global tourism sector has been affected as people no longer get out their regions due to lockdown. Thus the countries no longer get incomes from, the tourism sector, and also the people employed in these sectors have lost their jobs, thus the economy is affected significantly.
It is high time that countries start to think how they can survive independently, and the dependency on other people should be reduced. Each country should think on how to create jobs for its people and create goods and services that will satisfy all their citizens. The Covid-19 pandemic has brought a time whether countries should realize the potential that they have and strive hard to exploit it all to satisfy all the needs of its citizens.
Works Cited
Fernandes, Nuno. “Economic effects of coronavirus outbreak (COVID-19) on the world economy.” Available at SSRN 3557504 (2020).
Baldwin, Richard, and Eiichi Tomiura. “Thinking ahead about the trade impact of COVID-19.” Economics in the Time of COVID-19 59 (2020).