Since the inception of the year 2020, the world has been struggling with a life-threatening crisis from a global pandemic of ‘coronavirus’. The virus has not only created economic crises but also has taken the lives of countless people all over the world.
The virus outbreak started in a small town of Wuhan in China and gradually impacted about 188 countries all over the world. Several countries had to implement lockdowns to flatten the infection curve, therefore confining millions of people to their homes and ceasing all kinds of economic activities. As per reports from the IMF (International Monetary Fund), the global economy is expected to decline by 3 to 4 per cent in 2020.
The economy has seen a major downfall since the beginning of this year, giving rise to some key issues such as unemployment, rising expenses, job cuts, declining health infrastructure, shrinking businesses to name a few.
Let's take a deep look into the issues mentioned above:
1. Unemployment and the risk of recession
One of the most ill effects of coronavirus is the loss of jobs and rise in the unemployment graph, many people have lost their sources of incomes and are struggling to earn daily bread. Major economies around the world like the USA, UK, Germany, Italy, France are facing the issue of feeding the millions of mouths in their countries.
Millions of workers have been put into government-aided shelters and are under government schemes.
The risk of recession has been warned by some popular economists around the globe, many professionals from fields like education, global business, travel industry have seen a downfall in their work.
2. Crashing GDP
Coronavirus took a major hit at the GDP’s of many rising and successful economies, many sectors have seen a drop in their outputs, for example, the tourism industry alone saw a decrease in a trade from 70% to 50%. The global trade such as exports and imports have declined drastically, with lockdown being implemented all the trading has ceased and saw huge losses.
Economies of countries such as the US, Japan, the UK, France, Italy, Germany and Spain are expected to contract this year by 5.9, 5.2, 6.5, 7, 7.2, 9.1 and 8 percent respectively. India is expected to see a negative fall of 4.5% this fiscal year of 2020.
3. Decline in global trade
The world has seen a major setback in the global trade of numerous fields, the worst-hit industries are oil and gas, metals, food and beverages. Due to lockdown, oil prices fell dramatically, the gulf countries saw a major fall in their oil exports. The demand for heavy metals, chemicals declined as all the factories were shut down.
Export and import of several seafoods stopped because people are not preferring any kinds of processed foods which might be touched by several hands and increase the threat of virus spread. However the prices of grains like cereals, wheat, seafoods, tea, coffee has increased. According to the world economic forum (WEF) many SMEs have crashed since the pandemic broke out.
Apart from all the unfavorable impacts of the coronavirus, we need to stand strong and cope up with the current situation in order to recover the economy, manage finances and bring back lives to a previous normal.
Here's how to manage your finances in these tough times:
1. Keep track of your money:
Tracking your monthly expenses is very important in these times of financial distress, keep your cash handy and do not overspend unless important. Never ignore the fear of losing your job or being out of money, keep saving your money in your bank accounts for future requirements. Analyse your weekly and monthly expenses so that you know where you are spending the money.
2. Avoid debts:
Try not to borrow money from your friends or relatives, even stop using your credit cards for some time, as it will only increase the financial burden on you. Look out for easy instalment plans if you are planning to apply for a loan.
3. Invest in beneficial schemes:
Start investing your money in some beneficial way such as investing in government schemes, health insurances, look out for smart stock markets schemes where you will be able to make simple money without investing much initially. Try to invest in buying lands so that you may resell later in case of any emergency in the future.
4. Focus on your mental and physical health:
Since we are talking about our priorities during the pandemic, nothing can be more vital than your own and your family's health. Despite the pandemic aftereffects, your priority should be your own mental health. Start your day with a 30-minute exercise such as aerobics, walking and running. that will help your body to remain fit and your mind calm. Maintain a healthy diet, do not overeat or overstress about things. Keep yourself organized and maintain hygiene everywhere near you.
However, one positive conclusion which can be drawn from the pandemic is that it has taught us how important it is to manage your finances and keep your savings and jobs intact.
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