Protests in the USA deepen the economic crisis

Protests in the USA deepen the economic crisis
08 June 2020

Thousands of demonstrators poured into the streets for George Floyd, who was killed by the police in the USA. The demonstrations, which have turned into plundering and looting, have caused the crisis in the American economy to grow, which is already facing a difficult time.

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ISTANBUL (TR) - Thousands of people attended protests for George Floyd, who was detained on 25 May 2020 in the US city of Minneapolis for allegedly using counterfeit money and died as a result of the police officer's deliberate intervention. In protests spread all over the country in a short time, demonstrators set hundreds of cars on fire, while shops, ATMs and big markets were looted. It is stated that the economic losses are getting deeper day by day because the businesses that have been closed for a long time due to the coronavirus pandemic are now shutter against the risk of looting and plundering.

The American economy will shrink at least 34% in the second quarter of the year

While many international organizations such as the IMF and OECD stated that the situation in 2020 could lead to bigger results than the 2008 crisis, which had wide repercussions in both the economic and political order of the world. Aziz Hatipağaoğlu said, “With the coronavirus pandemic, losses occurred in key sectors such as aviation, tourism, finance and automotive, which are of great importance for the US economy. In addition, the price of barrels of oil fell by 133 percent to $ 30 due to the rivalry between Russia and Saudi Arabia, causing danger bells to ring in the US economy. The addition of the demonstrations that started with the killing of George Floyd, with the expectation of 34 percent shrinkage announced by Goldman Sachs, shows that the crisis is getting deeper.”

Unemployment increased by 234 percent in one month

Saying that the American Central Bank cut the interest rates to change the negative air in the economy, Aziz Hatipağaoğlu said, “Despite the announcement of a record financial support package with an interest rate cut and $ 2.2 trillion against the virus, the unemployment rate in the USA reached 14.7 percent in March with an increase of 234 percent in just one month. I think most of the shows are an expression of these economic problems. With the domino effect of the crisis, many big brands also decided to close their stores indefinitely. This precaution against looting and pillage actually causes the enterprises that have been closed for a long time due to coronavirus to not be normalized and the economic shortage to turn into a snowball.”

Pessimism in the USA will affect the world

Stating that the global economy has slowed down with the events in recent years and the events in America will have greater effects for the next period, Aziz Hatipağaoğlu said, “It is a great fact that we are heading towards a global recession. This economic pessimism in America affects many countries. In the second half of March, only 80 countries requested assistance from the IMF due to the inability to spin the wheels of the economy. Plans to relieve the economy with the IMF mean that the welfare of those countries will be put under mortgage in the future. Countries must urgently go beyond competition and produce rational economic policies.”

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