Khủng hoảng COVID 19 và Kinh tế thế giới COVID19 CRISIS AND GLOBAL ECONOMY

ĐINH HOÀNG LINH MAI - 20050878 COVID-19 CRISIS & GLOBAL ECONOMY Assignment of International Economics COVID-19 crisis is one of the current international economic challenges Overview -1 Analyzation -2 Recent updates -3 OVERVIEW THE CURRENT SITUATION Written by Đinh Hoàng Linh Mai QH2020-E KTQT CLC On March 11, 2020, the World Health Organization (WHO) declared coronavirus (COVID-19) a pandemic, bringing the world's attention to a dangerous reality Since then, the world is still reeling from its aftermath The worldwide extent and impact of the Covid-19 epidemic are unprecedented, offering tremendous challenges in analyzing its direct and indirect consequences on international economics It's a global shock, with supply and demand disruptions occurring simultaneously in an integrated world economy On the supply side, not only infections diminish labor supply and productivity, lockdowns, company closures, and social distancing also lead to a significant supply sources disruption On the demand side, household consumption and company investment decreased sharply due to layoffs and income loss (from sickness, quarantines, and unemployment), as well as the worsening economic prospects The further global challenge is the uncertainty about COVID-19, including the scale and pace of infection; how long and widespread shutdown measures will prove necessary That would lead to a corresponding to when and how international economics would completely recover from the recession ANALYZE THE CHALLENGE According to the World Bank's World Development Indicators, there is an unprecedented collapse in 2020: global GDP growth fell to -3,6%, even lower than that of 2009 (-1,7%) (Figure 1) Every region was vulnerable to significant economic slowdowns in the annual GDP growth in 2020 and has not seemed to stop South Asia grew by -6.6%, Sub-Saharan Africa by -2,4%, Middle East and North Africa by -3,7%, Europe and Central Asia by -5.7%, and Latin America and Caribbean by -6,3%, and North America by -3,7% It is clear that South Asia was the most affected as the virus was claimed to have originated from Wuhan, China "The COVID-19 epidemic has sparked a cross-border economic crisis." Excessive global volatility can have several consequences for economic growth Higher cautious savings, reduced or postponed investment (because of increased uncertainty and worse demand expectations), and a higher cost of capital (due to higher finance costs in a volatile environment) are among them (Cesa-Bianchi et al 2020) Following the widespread outbreak of Covid19, worldwide volatility soared, as it has in prior periods of the financial crisis The humanitarian and economic toll imposed by the global crisis on nations with large informal sectors, which account for around one-third of GDP and roughly 70% of total employment in emerging market and developing economies, is particularly alarming Policymakers must think of new ways to help these employees to be paid and to help their companies get financing in order to save their GDP from any further great drop In June 2020, Global Economic Prospects discussed the pandemic's immediate and near-term effects, as well as the long-term damage it has caused to growth prospects By using market exchange rate weights—the deepest global recession in decades, the baseline forecasted envisions a 5.2% contraction in global GDP in 2020, despite the governments' extraordinary efforts to counter the downturn with fiscal and monetary policy support -2 2001 2009 Figure The global GDP growth from 2001 to 2020 (annual %) Source: World Development Indicators 2020 COVID-19 also had a significant influence on international trade in a variety of ways Naturally, a greater COVID-19 burden in an exporting nation reduced production size, resulting in a reduction in export supply Exports fell, especially in industries and countries where remote work/operations are scarce The impact of the COVID-19 burden in an importing nation was mainly attributable to a reduction in aggregate demand Reduced demand resulted from lower wages and fewer visits to retail outlets The COVID-19 load in neighboring nations had an impact on a country's foreign trade Should COVID-19 outbreaks persist, should restrictions on movement be extended or reintroduced, or should disruptions to economic activity be prolonged, the recession could be deeper THE WORLD IN JUNE 2021 Since the appearance of various effective vaccines, we can now be optimistic about the international economy's recovery According to a recent survey carried out by McKinsey&Company, although the COVID-19 pandemic remains the biggest danger to growth in respondents' nations, the percentage of executives who believe so has dropped considerably Respondents in wealthy economies are likewise less concerned about the epidemic than they were in April In comparison to half of their emergingmarket counterparts, 28% of them see the epidemic as a threat to domestic growth According to a recent poll, 65% of respondents in rich nations witnessed epidemic as a threat to their countries' prosperity Meanwhile, the percentage of respondents citing inflation (the second-most-common risk, reported nearly twice as often as in April) and supply-chain disruptions have grown Inflation has also climbed in the ranks as a threat to global economic development However, reactions suggest that the epidemic remains a far greater concern than anything else At the same time, respondents think supply-chain disruptions are a greater risk to their businesses' development than in previous polls When the first COVID vaccines arrived, people started talking about the “light at the end of the tunnel.” When questioned about the general state of the economy in the months ahead, executives express a more optimistic perspective In the next six months, 79% of respondents anticipate conditions in their home countries to improve, with a majority of respondents in each area expecting improvements Their worldwide view is even brighter, with 81% expecting gains in the coming months Finally, respondents believe their own businesses' prospects are improving In the next few months, there would possibly be a rising number of people anticipate their staff numbers to grow, while 74% expect corporate earnings and demand for their products to rise in the next six months  ... widespread outbreak of Covid1 9, worldwide volatility soared, as it has in prior periods of the financial crisis The humanitarian and economic toll imposed by the global crisis on nations with... the COVID- 19 burden in an importing nation was mainly attributable to a reduction in aggregate demand Reduced demand resulted from lower wages and fewer visits to retail outlets The COVID- 19 load... -6.6%, Sub-Saharan Africa by -2,4%, Middle East and North Africa by -3,7%, Europe and Central Asia by -5.7%, and Latin America and Caribbean by -6,3%, and North America by -3,7% It is clear that