Crowd’s view: COVID-19 Impact on Economy
Sectors that will be impacted
It’s naive to think that only a few sectors will be affected. The whole economy is linked to a large extent. To begin with, it is s confirmed that Airline Industry is affected due to restrictions on travel. When PM cancels visits it shows the magnitude of the problem. Usually, when some sector is impacted, public figures try to put on a brave face to ensure the population at large does not lose confidence. consumption of Petrol Diseal is already down affecting refineries and oil prices. Now with all travel being banned Hospitality industry across all countries will suffer. Hotels will see a downfall. In turn, all those who are employed or supply goods or services will also be affected. When people are asked to work from home, transportation services be it Uber Ola or public Transport is affected. People will avoid crowded buses and train malls and theatres leading to a drop in revenues in all these sectors. Software companies will no longer be able to send staff to work online. Hardware exports will be affected as consignments need to be sanitized. Imports from China are already down. Sports is already impacted with a few tournaments canceled. There is a consequent loss in revenue to even sports channels. Food industry is affected as a large number of people have started to avoid nonveg food. Those rearing birds & animals are in distress leading to culling. Over the next fortnight, the whole world will feel the impact.
Multiple industries will get affected by Coronavirus:
The transportation sector will be the most severely hit because as more cities get locked down, people will stop traveling across countries or even across cities. As a consequence of that, the Hospitality industry will get negatively affected. The retail sector will be hit by supply chain and demand issues too.
The construction and manufacturing sector is also suffering hugely because it is China’s one of the most significant industries.
On the flip side, the health sector will see massive growth as more and more people rush to hospitals.
Sports-One of the worst affected area will be the sports sector. It is estimated that if the upcoming IPL is canceled it will lose 10000 crores (> $1 billion).It’s such a huge amount from India point of view. All the other major events all around the world have also been canceled.
Entertainment-As this virus spread faster through mass gathering, this is another field that will be hit very badly, most of the movies have been shifted backward than its original release date.
Tourism-Now no has no doubt about this sector. This sector will be the worst affected out of all.The travel ban is not likely to be lifted for the next 15 days, affecting airlines, hotels, and the food industry.
Office work-Now mostly people think that office work will be affected the most, but this is not true.In this digital age, anybody can work from anywhere. All the major companies have told their staff to work from home,so the work hasn’t stopped but only its place has been changed, also i think that working from home will increased the productivity(for those who do their work honestly)in work.
EDUCATION-Now one will think how education is least affected even though schools and colleges are closed.But,if one were to get only education from school & college we wouldnt have great personalities liks Steve jobs,Dhirubhai,etc.Thanks to online education app like
Byjus,Gradeup,Unacademy,education is easy to access.I for myself have enrolled in Gradeup and my younger siblings in Byjus,no need to worry about school,just open the app and study whenever i want.
Travel and Tourism : Visa Cancelling, Flights Cancelling, Major Events cancelling is already a Crisis situation for Travel Industries Hitting Airlines, Cruise, Travel Companies, Forex, Visa’s etc. badly. They don’t only have to return all the money but also have to cover up losses as much as possible to be able to sustain in the business.
Entertainment : Huge Events Like IPL, Olympics, and other major Sporting events are hanging on a Loose Thread and are on a Verge of Cancellation. Already alot of money has been invested in for promotions and managing these huge events and cancellation will lead to huge losses for sure.
Corporate and Industries: Many IT companies , Corporate have closed down and asking employee to work from home. This impacts Work Force Management ultimately losses as they can’t meet deadlines.
Import and Exports: With government regulations coming in action many countries have stopped Import and Export of Goods resulting in Low Stock availability and high prices as we all know supply and demand relation.
Many other sectors: Since in today’s digital world everything is interlinked so this is impacting almost everything from Stock market, health related products, Daily Foods Etc.
COVID-19 will impact on the economy including economic slowdown, trade, supply chain disruption, commodities and logistics. Up to a large extent, it will impact indian industries.
In Imports, the dependence of India on china is huge. India’s total electronic import accounts for 45% of china and around 90% of certain mobile phones comes from china to India. So, it will have a significant impact on indian industries. Tourism industry is severely hit as there is decline in the number of tourist. Airline industry is affected due to restriction of government and decline in the number of travelers. Poultry industry is badly hit. Wholesale price of chicken is declining rapidly as the demand for supply is reducing. Film industry is also badly affected as there is decline in the number of people visiting cinema halls.
What should the Government do?
Honestly Govt cannot do anything . It’s beyond any government to take decisions as virus spreading leads to ripple effect. Tough for anyone to provide solution to every sector in economy
As there is no vaccine available yet,the one and the only thing which the goverment can do to minimise the impact on economy is not to not allow this virus spread in community,because if the indian situation becomes like china,india will no doubt go into recession.More the people get sick,more the government has to spend money behind it.So it is very important not to allow this virus spread.But,i am glad and i can proudly say that India,compared to european countries and most of the developed countries has taken very effective steps to tackle the virus.Also even if India does control the spread of the virus(which by far has been done vey nicely),it cannot control it in other countries.As this virus has spread all around the world,the trade between india and its partners will be affected very severly.So when it comes to minimise the impact on economy it does not only depend on india but also how bad the virus affect the other countries.
RBI should immediately cut interest rates to give stimulus to market.Put more resources in health sector for short term.
Assure markets and businesses that things will be fine after a while and not to get panicked. Help coronavirus patients financially especially the vulnerable population.
Government cannot do much to minimise the impact on economy. But it can spread the awereness and the impact on the people and economy by taking positive measures to handle COVID-19. They have to set up the district centres with better equipments to handle COVID-19.
I Feel Government is quite pro active and taking all the possible measures already to prevent this from spreading. Awareness is on a high scale and any person showing symptoms is taken in isolation and treated accordingly. Strict checking of people coming in from affected areas is required.
How long will this last?
Frankly nobody can predict , when this virus will end. It is not easy to control nor prevent. Celebrities and ministers in various countries are affected , that itself reflects the impact of Corona Virus. All those affected were in touch with XXxxxxxx number of ppl in recent past . Even most advanced economies with best possible medical facilities and literate population are struggling to control. Compared to rest of world Indians travel less but hygiene levels in India is bad. So it’s a tall order to give a deadline.
The no. of cases in China are already on decline as the exponential graph is now reduced to a plateau. It affected China’s economy for about 3 months and is expected to affect it for about 2 months more. In countries where it is spreading its footprint, they can expect to get affected for atleast 3-5 months.
As summer comes close, the number of cases might reduce and eventually stop the exponential rise of coronavirus in Northern hemisphere. But then in southern hemisphere, it will be winter and number of cases might rise there.
I think this thing will haunt our economy for months. as once the things start coming back in place every conglomerate would like to first recover the huge losses they have come across in this crisis.
Also, the loss of Lives which we are coming across won’t be repaved ever. The economy will ultimately be stable. let’s hope for the best and prepare for the worst. I wish everyone to be safe from this nightmare.
I think it will impact for the next 2-3 months as the number of viruses affected are increasing in India. In the Kerala state, there are holidays for schools and colleges and the shut down of cinema theatres as a measure taken by the government. The economy is already hit badly mainly because of the fear people have against COVID-19. There is a decline in the number of infected people in China, and hope it will spread to other parts of the country as well.
The next 2 weeks are very important and will give us the idea, as of right now while i am writing this,100 people have tested positive in India. If the situation is not worsening like in china or Italy, the impact of this on the economy will be very less and it would take more than 6 months to recover, but, this is only possible if the situation does not worsen, in India. Also as I said in the earlier point, even if India is able to control it properly, it will depend on how bad it will affect the world, and right now the situation is worst in European countries. But China has controlled it and slowly in china things are back to normal. So yeah about 2 months, to start trading back normally and more than 6 months to recover from these losses.