With this pandemic in full speed, many people are concerned about a recession. Economists say a recession is inevitable due to everything that has happened and continues to happen. The biggest worry is the unemployment rate that is expected to spike to a possible 20% in the future with more and more people continuing to be laid off. The economy is expected to be down by 24% this year, and it is difficult to tell how long it will take to recover. The biggest concern appears to be in the small businesses that do not have enough cash nor credit in order to survive past this pandemic and will most likely suffer the most. It seemed like manufacturers were shielded from the blow but now even manufacturers are being asked to halt production. It is also predicted that the GDP in 2020 will be reduced by 8.4% ($1.8 trillion). The overall takeaway is that the severity of economic slow down depends on the seriousness and the length of the pandemic.
How long do you think this may last? Do you think the calculations are accurate or will they, in reality, be less or more?
https://www.nytimes.com/2020/03/21/business/economy/coronavirus-recession.html?auth=login-google
5 comments:
I think that the calculations would be accurate assuming that the virus will prolong for as long as health professionals have stated it would. If by some miracle the virus' growth and spread slows down overtime, these numbers could be overstated. If the virus expands even more exponentially and prolongs, the numbers could understate the economic devastation that could occur. I believe that a recession is inevitable at this point and the economy will slow down, but recovery will take place overtime as the curve flattens further. This recession would not be like any before, not because of the economic impact, but due to the global social impact.
If the pandemic lasts longer than two to three months, then the chances of rapid economic recovery seems pretty low. In this scenario. there will be a slow and gradual recovery, which definitely will impact greatly on the economy. This U-shaped economic recovery seems like a likely outcome, as the new hotspots are located in New Orleans, and New Jersey.
It is hard to say how long this will last because we have never seen something quit like this before. These calculations seem realistic, but it is hard to say because we are still in a period of huge uncertainty regarding when this will end. I agree with Sophia that a recession does seem inevitable at this point and we are going to see the economy slow down.
I agree with all the comments above, and as for the question of how long this will last, I don't think we have the capability to answer that question as we are all still figuring about this virus and the vaccine is still on its way. I do believe that the calculations by most of the health experts said are correct. The economy is definitely going down into a recession and it kinda looks scary as nobody has ever seen this kind of thing before. On the bright side though, Wuhan just reopen their lockdown, so we as humanity has to have hope and we will prevail.
I do agree that the economy is facing a recession right now due to the coronavirus. But I would also say that the once the coronavirus is taken down, people will respond very strongly and consumption spending will spike. I could even see it being higher the months following the quarantine because people will want to get out and do things, and the nature of this world is that everything costs money.
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