The outburst of the Covid-19 pandemic across the globe has affected public health and shattered the global financial market. The covid-19 crisis has significantly reduced the source of income, elevated unemployment, closed various manufacturing units and transportation.
The Measure Of Future Economic Activity Dips Due To Coronavirus
Most countries have delayed evaluating the risk of Coronavirus infection, which led to the spreading of the virus across the globe. The delay made in responding to control the effect of the virus has made it more proliferate and tough to eradicate.
The coronavirus and its variants are likely to cause further damage to the countries’ health system and economic condition and for which proactive attitude is expected on the international level.
The World Health Organization has declared Covid-19 as a pandemic on 11 March 2020 because of its severe effect on public and global economic conditions. The loss of the economy accounted for the reduced productivity, loss of life, closures of businesses and trades, and destruction of the tourism industry.
The world has failed to work together to invest in preparedness to prevent the spread and reduce the risk of epidemic. Countries should promote and finance technological platforms to increase Research and developments activities to capture the new pathogens before they can cause major harm.
The affected countries can share the technological innovations regarding contact tracing to manage the spread of infectious variants of Covid-19. The Omicron variant has been rated as the top-most risk factor to domestic growth followed by inflation.
Now with the development of immunity among people and the government’s vaccination program, the virus effect on public health is ruled out. Most companies expressed their preparedness to face future crises. Simultaneously it is estimated that hiring will enhance but talent shortage will persist. The labor shortage also plays a significant role in hindering the company’s growth. The building of new houses in the United States has declined since January 2022 due to a shortage of workers, materials, and the rising cost of timber.
Moreover, it is a known fact that low inflation is beneficial for the economic growth of any country since it helps to control the price of essential items and also facilitates people to borrow and invest in purchases. But due to the increase in inflation during the pandemic, there had been a major hit to the country’s economy. The hike in inflation results in a decrease in the value of dollars increased interest rate on loans and reduced returns on savings.
There will be a rise in overall prices due to inflation, thereby reducing the purchasing power of the public because the higher inflation will increase the cost of living and slow economic growth. Healthy inflation of 3% is encouraging since it enables wage increase and corporate profitability. The higher inflation is a burden for people who have lost their job or got reduced income during the pandemic since they cannot afford the increased price of commodities.
The primary cause for the increase of inflation is the heavy loss that several industries and business houses have incurred during the pandemic. The two-year restrictions of running the business and industries combined with a shortage of skilled workers have resulted in a big loss for the people in business. Now to make up for the loss of money and resources the prices need to be hiked substantially, leading to inflation.
In America, there are two main inflation gauges, out of which one is Consumer Price Index and the other is Personal Consumption Expenditures Index. The Consumer Price index measures how much the urban consumers can buy out of their own pockets.
The Personal Consumption Expenditures Index includes things that people do not pay directly, like health care that benefits from insurance and government policies. However, there are chances of price getting down since companies are planning to supply the demand of goods that people want to buy during a pandemic altered economy.
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