The Impact of COVID-19 on the World Economy

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The impact of the transmission of COVID-19 to the world economy is worse than the global financial crisis. At a joint press conference with the World Health Organization (WHO), the International Monetary Fund (IMF) said the world economy was in a recession. This is because many countries are facing a weak health system since this pandemic occur. The impact of Covid-19 on the world economy including;

Source: Google Image

High unemployment issues

Source: Google Image
  • The International Labor Organization (ILO) expects the COVID-19 crisis to increase unemployment especially in the services sector.
  • The informal sector in developing countries is the most at risk. 
  • According to the ILO, of the 3.3 billion workers globally, four out of five workers are affected by the closure of the premises either partially or fully.
  • Long term effect will continue to be felt by the cohorts that stepped into the labor market during the economic crisis.
  • The cohort will continue to face prolonged unemployment, receiving wages and low wages and low career prospects and development over the years a decade ahead, compared to youth entering the labor market before or after economic crisis.

Reduce job opportunities

Source: Google Image
  • Last month, amidst the spread of the COVID-19 outbreak in the U.S., 60% of employers had job openings, with nearly 25% of employers closing all their positions, according to the Glassdoor job search platform.
  • More youth in the informal sector will be affected by the pandemic Covid-19 crisis.

Adverse effects on the income of the world population

Source: Google Image
  • Aside from the human tragedy, the direct impact of the Covid-19 is on global economic income.
  • Youth are more exposed to the employment crisis and face lower income gaps as wages and salaries are lower.

Impact on Foreign Direct Investment (FDI)

Source: Google Image
  • World Bank Senior Economist in Finance, Competitiveness and Global Practice Innovation, Smita Kuriakose, said the impact on the Malaysian economy was expected based on COVID-19's negative impact on foreign direct investment (FDI), commodities and tourism as well as domestic shocks following the Control Order. Movement (CPP). He said globally, trade had fallen sharply with the worst phase of the 2008/2009 global financial crisis.
  • Since the COVID-19 outbreak, the largest outflow of the emerging market has a record US $83 billion, while global FDI is projected to decline 30 to 40 percent this year.

Source: Center for Global Development

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