Corona Economic Impact worse than Global Trade Crisis of 2008

Corona Economic Impact worse than Global Trade Crisis of 2008

Image source: ZNBC

According to the recent prediction of the World Trade Organization (WTO), Coronavirus led economic paralysis can result in a way more intensified Global Trade Crisis than that of 2008.

Lately, a lot of unexpected and unimagined has been happening all around the globe. In the era of cut-throat competition, everyone is sitting quietly at home, praying for the earth’s escape from the claw of the fatal pandemic. Except for some essentials, all the businesses and productions are under temporary locks, and economies are falling sharply. In these situations of health emergency and financial hardship, WTO has envisioned a global trade crisis, much fiercer than the recession of 2008.

The organization has estimated a 13% to 32% contraction for this year in its recent report. It has mentioned the reduction of 13% in the trade of goods as a relatively optimistic scenario.

According to the report, Roberto Azevedo, the director-general of WTO, has acknowledged the sensitivity of the situation and the necessity of settling health crisis. He has supported the government for prioritizing the protection of people’s lives. But, at the same time, Roberto has also emphasized the painful consequences that the trade declines would leave on businesses and households. He has revealed that a financial crisis, more worsen than that of 2008, is all set to hit the global economy.

Also Read : Impact of coronavirus in recycling sector – How much has it affected?

Amid the ongoing economic uncertainties, foreseeing a certain period of financial recovery is impossible. Considering the same, the WTO has forecasted the two extreme cases in its report.

The Optimistic Case: Recovery of severe decline in international commerce can start from the second half of 2020 if the next few months bring substantial progress in controlling the health calamity.

The Pessimistic Case: If not controlled, the global trade can fall in the great depression, similar to what happened 90 years ago, resulting in a more prolonged and incomplete recovery.

Highlighting the current extents of uncertainty, the organization has warned about the chances of dissimilarities in the predictions and actual outcomes.

Roberto has requested the countries to come together in controlling the economic damage and laying the foundations of recovery. As per him, coordinated efforts will strengthen the recession-fighting power of all.

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