COVID-19 and Global Recession
COVID-19与全球经济衰退
Slightest thoughts of recession can be scary, however, it may be beneficial to understand what it is and how we can get through it. Covid 19 has once again brought a scenario of global recession. And, it’s high-time that everyone, from students or commoners should know everything about it. Let’s begin with knowing the basic meaning of recession:
What is recession?
An economic recession is a time period of economic downfall or decline. It is signalled by a massive increment in unemployment, a huge dip in the housing sector and a decline in the stock market.Officially, a global recession is not declared untiled the GDP (total value of goods and services) declines for two or more than two quarters.
Recession during COVID-19 time-period
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Though there are various lessons that can be learned from global recessions that ever happened, yet there is a big difference between the previous ones and the COVID 19 recession: None of these economic downfalls were brought down by a worldwide pandemic.Another crucial thing is to understand about global recession is that it is merely a normal part of the economic cycle. As per the National Bureau of Economic Research, an average expansion time period stays up to 59 months, or only of five years. For instance, the last major global recession ended in year 2009. Its recovery was started in the midst of 2011. This is the reason why mostly economists claimed that we were overdue a global recession, even before we got hit by novel coronavirus.
Economic Downfalls of Global Recession
Everyone knew that the cyclical nature of economic growth and businesses would put us into another global recession. What everyone has no idea about was that it would coincide with a once-in-a-hundred-year worldwide pandemic. This pathetic and daunting combination has given birth to economic downfalls of near-historic proportions, such as:
Unemployment: Only in the USA, more than 38 million people filled jobless claims. This happened only during the 9 week period starting from 12TH of March. March saw only the initial phase of COVID-19. This figure has no or may have just a slight mention of freelance and gig workers, who could not register for unemployment claims. Also, the people who faced massive cuts in their salary were not counted.
* Stock market: Dow Jones experienced a 2,997 point drop, the largest in its 123-year-old history, on March 16. It’s impossible to know whether the stomach-turning drops in the stock market are due to the novel coronavirus or a bull market that has run its course.
* Housing: As per the National Association of Realtors (NAR), the total house sales were expected to decline by 39.5% in the second quarter of 2020. These numbers are expected to have a rise after the COVID 19 gets away, but currently they are unfortunate reality adding to the global recession.
GDP: Millions of Americans were sheltering in place, hundreds of businesses were shattered. All this was reported in March 31 when Goldman Sachs economists predicted
a major 34% drop in GDP in the upcoming months.
* Consumer confidence: The Global Consumer Confidence Index surveys show that there are more than 17,500 adults below the age of 75 in around 24 nations. The Global Consumer Confidence Index of June was 40.0, 8.7 points below than the number of January, and this is problematic. This situation occurs when consumers spend less due to insecurity and eventually slows down the economy as a whole.

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