COVID-19 came as a sudden wall to the development of economies. Millions of people felt the unprecedented attack of the pandemic.
Surprisingly, the strongest economies could not bear the attack of COVID-19. Although, the developing nations felt a stronger strike.
It was so sudden that its loss is still impossible to reckon in numbers.
However, some units can depict the loss to economies.
The economies shrunk to the extent that the GDP took the negative path.
Now important is to understand the reason behind the economies falling drastically.
Why couldn’t the strongest economies uphold their economy?
Travel Ban: The travel ban became the major reason for the loss of a source of income.
Nowadays, economies earn through tourism. Indeed, it is considered a prominent way to generate foreign currency.
While mentioning the lack of source of income, we need to understand the other perspective of expenditure.
The expenditure reduced the treasure of the government while protecting the economy.
Even countries with low medical facilities were worst struck. As the number of patients increased, the number of required medical care couldn’t be accessible.
The lockdown in various countries forced human resources to survive on their savings.
Importantly, daily wagers weren’t able to survive. Subsequently, government expenditure slightly diverted in that direction. Additionally, the average national income reduced drastically.
The production halted with the emergence of COVID-19. Although, industries tried to maintain the pace. Unfortunately, the unprecedented event flushed away from the major source of calculating the GDP.
GDP referring to the Gross Domestic Product is the total goods or services produced within the boundaries of a country.
Consequently, the gap between production and services also contributed to the reason ahead.
These are the major points why economies globally felt the hit of the COVID-19 pandemic.
Certainly, the impact will be felt shortly. As the havoc and chaos of the pandemic are still in waves. Probably, India has also started to witness the second wave of COVID-19.
Perhaps, there are 3 major reasons for every economy’s slowdown or negative downfall:
- No source of Income
- Expenditure through savings
- No production
While the businesses were affected, a few grew in the disaster of the pandemic. Perhaps, their reachability remains significant enough to save the economies.
Author: Mansi Goel
Featured Image Reference: Fair Observer