Coronovirus adversely affects the economy, which may prompt weak governments to take steps
The situation with coronaviruses could deprive the world economy of more than $ 5 trillion over the next two years, exceeding annual production in a developed country like Japan.
This is a warning from economists on Wall Street. The world has started experiencing the deepest recession since the 1930s, with most businesses closing at the request of governments and people. The recession is forecast to be low, but it will take time for economies to catch up.
It is worth considering that with an unprecedented level of monetary and fiscal stimulus, GDP is unlikely to return to its pre-crisis trend until at least 2022.
In this situation, politicians face the heavy task of making an appropriate decision and not to panic, so as not to open their economies early and which can bring back the virus.
The World Trade Organization stated that epidemics in the post-war era could cause a decline in international trade flows more than ever before. European Central Bank chair Christina Lagarde also said that the eurozone economy produces between 2% and 3% in blockages each month. But this is not the reason for lifting the restrictions and fueling the growth of the epidemic, which will have even more economic consequences.
Summary PAYSPACE magazine
Recall, the US Federal Reserve has launched a large-scale program for $ 2.3 trillion to support local administration, as well as small and medium-sized businesses. The goal is to help the American economy deal with the coronavirus epidemic.
In a statement, Fed President Jerome Powell said the central bank is trying to “help and ensure stability” during quarantine, while Americans are forced to stay home.
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By content: Bloomberg