Coronavirus pandemic will cost the world economy 3 trillion dollars

Coronavirus pandemic will cost the world economy 3 trillion dollars
01 April 2020

The coronavirus pandemic directly affects human life and predictions about its economic dimension emerge. While the world's major economies are facing a recession, experts state that serious measures should be taken in order not to decrease the production volume and to decrease the demand in the domestic markets.

*** This release is originally published in Turkish.
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ISTANBUL (TR) - The coronavirus, which first appeared in China and was described as a global pandemic by the World Health Organization, continues to increase its impact all over the world. The virus, already infecting 860 thousand people and costing more than 42 thousand lives, has affected the working lives of millions of people and caused great damage to the economies. Although it is thought that the coronavirus pandemic will end in the summer months, these forecasts are uncertain and create anxiety in the markets. Stating that it is inevitable for all economies in the world to shrink in 2020, Economic Policy Specialist Dr. Aziz Hatipağaoğlu said that this situation will directly decrease the production volume and that it is necessary to take measures to reduce the negative effects on employment.

“Giant economies face recession"

Stating that the effect of the coronavirus pandemic on the world economy will be around 3 trillion dollars even if it ends with the summer months, Aziz Hatipağaoğlu said, “Many countries that are integrated into the global economy, especially developed economies such as China, the USA, Germany, India, South Korea and Japan, are going towards a recession. Especially in countries like India, the outbreak will have serious consequences for the world economy. In the next few months, we will see that countries with high external financing needs have entered turbulence and that these countries have weakened financially. At this point, it is necessary for these countries to set a road map for how they will meet their financing needs in the near future.”

“Globalization theory is destroyed by coronavirus”

Stating that the tensions between the countries escalated with the coronavirus epidemic, Aziz Hatipağaoğlu said, “The countries are doing practices that do not comply with the law regarding the trade of health equipment. The Czech Republic seized goods going to Italy while Italy did the same for Tunisia. It is an undeniable fact that the European Union is crunching. This epidemic will lead to absolute change in the capitalist world system based on globalization. Globalization cannot continue as it has come to this day. Many of the countries will return to the principle of economic competence and become closed to them. Self-sufficiency will gain importance.”

“The world economy will recover in the last quarter at best”

Underlining that there is no other event affecting the whole world at this scale recently, Aziz Hatipağaoğlu said, “We will need more economic and social policies that will form the welfare society in this period. As the experts say, if this pandemic diminishes in June and July, improvement can be seen in the last quarter of this year. Whether this recovery will be fast or not depends entirely on the decisions of economies. Many countries' central banks, especially the US Central Bank, the Fed, and the European Union Central Bank, said that they would meet their liquidity needs to the extent necessary. governments to state that they will strongly support companies, employees and society; will strengthen the sense of trust of the society.”

“Competitive sectors and disadvantaged sectors should be supported”

Stating that it should be supported by determining the competitive sectors such as tourism, aviation, automotive, textile and retail, which are very important for the economy of the countries during the global recession periods, Aziz Hatipağaoğlu said, “In addition, those who are in the middle-income layer, retired, disadvantaged, disabled and so to speak It is vital to support the recession without supporting any excuse in the period. The decrease in production volume can only be prevented by increasing effective demand. For this reason, while purchasing power must be kept alive in all segments of the society, real income must be increased during the exit from the recession.”

Contact: Tülay Genç | [email protected] | +90 (850) 885 12 55