Covid-19 Devastated the Global Economy

Global Economic Effects of Covid-19
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Global Economic Effects of Covid-19
Introduction
COVID-19 pandemic has resulted in a considerable slowdown of economic activities around the world. Given its rapid spread, countries have adopted public health measures like social distancing to contain it. As part of social distancing, the governments have required businesses, schools, and community centers to close down(Brodeur et al., 2020). Mass gatherings have also been prohibited, and many countries have imposed lockdown measures, restricting travel only for essential needs. These measures have affected economic activities around the world. COVID-19 affected major economic sectors like tourism and hospitality. The stay-at-home order imposed by governments to combat this epidemic has resulted in the loss of jobs and livelihoods. Businesses operations became weak, and the cost of living increased due to COVID-19. The International Monetary Fund (IMF) predicteda decline in the global economy by over 4% in 2021, higher than that of the 2008 global financial crisis(Brodeur et al., 2020). The contraction is due to the movement restriction, reduced economic activities, and increased uncertainty. Presently, the economic implications of the pandemic are extensive, withadverse effects on the production supply chain, labor markets, and financial sectors.
Causes of the COVID-19 Pandemic Crisis
COVID-19 is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2):- a novelstrain of coronavirus that belongs to the SARS species (Adhikari et al., 2020).This disease triggers a respiratory tract infection. The recent outbreak of COVID-19 began in Wuhan, China, in late 2019. Scientists believe that this new strain originated from bats, but one study attributes its origin to pangolins (Medical News Today, 2021). Since the outbreak of COVID-19, the disease has spread worldwide, affecting the global economy.
Comparison of COVID-19 Crisis and 2008 Crisis
COVID-19 has hit hard the global economy, resulting in a massive crisis. According to Kumar (2020), the 2008 financial crisis was a slow hit that affected the macroeconomic development after months. The problem was a banking crisis caused by overly bank debts, and there was no equivalent crisis on the economy’s supply side. However, the COVID-19 crisis came with animmediatefall in economic activity as it led to the shutdown of major companies' operations and the closure of the global supply chain(Chaudhry, 2020). As observed, this pandemic is striking many economic sectors harder than the 2008 financial crisis. Most industries like travel and tourism, automotive, and engineering sector will recover from the losses they sustain from COVID-19 after a long time.
Both crises share uncertainty as to the primary factor in their existence and spread. Uncertainty is a non-quantifiable risk that cannot be traced easily to predict its occurrence and impact. It applies to both crises. In a nutshell, Americans were granted subprime loans with Neither Income Nor Jobs and Assets (NINJA) until 2007(Strauss-Kahn, 2020). The latter risk was hid...