THE CORONA VIRUS AND THE ECONOMY

The economic uncertainty caused by the Covid-19 and would cost$ 1 trillion to the global economy in 2020, as expected, the United Nations Conference on Trade and Development (Unctad).

According to the director of the division on Globalisation and Development Strategies of the agency, and Richard Kozul-Wright, the economy is expected to slow down, and to grow by less than 2%.

The specialist has said that the virus that causes the instability in the global financial markets, worries about a global supply chain, and the uncertainty in the price of crude oil. According to him, a few countries are to escape from the effects of it.

Unctad has also examined the consequences of a worst-case scenario, in which the global economy would grow by just 0.5 per cent, reaching the conclusion that it would have an impact of more than US$ 2 trillion in Gross Domestic Product (GDP), the sum of the goods and services produced in the world.

To combat these challenges, the expert said: “the government needs to invest, to avoid the kind of collapse, yet the most bad.
Kozul-Wright said that in China, where the virus first emerged in December, you must enter the measurements of expansion”, as the increase in spending and tax cuts. According to him, the United States is expected to follow the same path.

Europe and the euro zone, he said that the signs were negative by the end of 2019. Right now, it's “almost certain” that the region will go into a recession over the next few months. Indeed, it is also Germany's economy, saying he is in a particularly weak, in Italy and in other countries of the periphery, and to deal with “tensions are very serious.”

The countries of Latin America, the expert, the Unctad said that, they are also vulnerable and Argentina, in particular, is struggling with the knock-on effects of this crisis.”

Low-income countries, whose economies are driven by the sales of raw materials, will also be affected.

Kozul-Wright, he concluded by saying that “it is necessary for a range of policy responses and institutional reforms in order to prevent a health scare and located in China becoming a global economic meltdown”.