The Article is originally published in Trade Insight Vol. 16, No. 1-2, 2020
Author: Fahmida Khatun, Centre for Policy Dialogue (CPD)
The world is passing through a major catastrophe since 8 December 2019, when the first known case of pneumonia with an unknown etiology was found in Wuhan City, Hubei Province, China. Later identified and named COVID-19, the world is now severely affected by this novel coronavirus. Despite the efforts by governments worldwide for taming the outbreak, its spread is still uncontrolled and unprecedented.
COVID-19 has not been confined to only being a health hazard but has had a major economic impact. Measures aimed at containing the infection has severely affected almost all economic activities such as domestic production and supply chains. The global economy is integrated through trade, remittances, investment and foreign aid. So, the COVID-19 pandemic has given rise to economic challenges coupled with uncertainties and unpredictability both at global and national levels. Countries have already started and will continue to feel the heat of economic slowdown in different ways. Disruption in the supply chain, lower production of agriculture and industrial goods, and closure of aviation, tourism, restaurants and hotel businesses are having knock on effects on the job market. Businesses continue to lay off workers, slash salaries and payments and are freezing recruitments. It is almost clear now that the consequences of this pandemic will be prolonged for several more months in the absence of vaccine and its availability to all. Hence, it has been predicted that COVID-19 will lead to the hardest and longest global recessions encountered so far.