There are many reasons that make the economy undergo certain changes at a certain time. However, the Coronavirus Pandemic took center stage. The impact of the Global Financial System and coronavirus has been felt in recent days.
The relationship between the Global Financial System and the Coronavirus have shaken the economies of developed countries. This usually has negative effects on industries and production as such.
The impact on the Global Financial System and the coronavirus have affected the markets and has influenced the drop in oil prices.
Globalization has converted the correspondence between people and their environment. That is why now the local is global and the global is local, this applies perfectly in the world situation we are experiencing in the face of the Coronavirus pandemic. The Global Financial System and the Coronavirus are generating a financial earthquake that is spreading and is of great magnitude.
Uncertainty reigns in the economy – The Global Financial System and Coronavirus
At present, fear and uncertainty reign in the vast majority of countries where the coronavirus has been present. The relationship between the Glonal Financial System and coronavirus is very complex, as it has reached the stock markets and economies around the world.
The problem that has arisen in the most affected countries is that of slowing down the spread of the epidemic. Well, this has led governments to apply radical quarantine measures. For this, public buildings, companies and shops have been closed. Likewise, mobility has been reduced.
It should be noted that pets are not transmitters of this disease, so people are called to not to abandon their pets.
This situation with the Global Financial System and coronavirus are having dire consequences. For this reason, production, consumption and tourism have been limited in most affected countries. In this sense, the ravages at the economic level are incalculable.
International organizations in the economic field estimate a considerable reduction
The highest authorities in the international economy and finance are concerned. Entities such as the Organization for Economic Cooperation and Development (OECD) and the International Monetary Fund (IMF) view the situation with pessimism. These entities indicate there will be negative effects on the Global Financial System due to the Coronavirus. The effects on the global financial system and the coronavirus, itself, are enormous. For this reason, world economic growth in 2020 will be greatly affected.
The situation of the Globabl Financial System and coronaviruses force states to inject large amounts of money to keep the system working.
In this sense, measures have been taken where people who have been temporarily out of work continue to collect to be able to pay the bills.
In the case of France, they have announced that they are suspending the payment of rent and utility bills for electricity, gas or water. For this, the president of this nation announced that the State will be in charge of paying the bank loans of people who cannot assume them due to the situation of the World Financial System and Coronavirus.
Global financial system and coronavirus – Stock market crash
The role of the global financial system and coronaviruses have had their negative effects reflected in the different stock exchanges in the world.
One of the reasons for this effect is that companies stop producing and people stop consuming. Since stock exchanges and markets trade in the value of companies and raw materials, the value of companies falls.
A date that was marked in history was March 9, as it became the second “black Monday” on world stock markets.
Indeed, preventive measures against the coronavirus that has spread in many countries. In this sense, the World Health Organization (WHO) had no choice but to classify it as a Pandemic.
The situation of the global financial system and the coronavirus is very delicate. Well, the context has been worsening with pronounced collapses in global markets.
By March 16, investors and companies in the United States saw the consequences. It should be noted that there was a 10% drop in the New York Stock Exchange. This is classified as one of the most important on the planet.
In European countries such as Italy and Spain, the Ibex 35 has experienced heavy losses. The effect on the global financial system and the Coronavirus is incalculable.
Some fear that the impact on the Global Financial System and the coronavirus will trigger a new economic crisis, as occurred in 2008.
From all this situation that is being experienced on the planet, there is an economic sector that is benefiting. This is the pharmaceutical industry especially those who are dedicated to researching a vaccine for coronavirus.
In the case of the Asian country and where this terrible pandemic originated, the coronavirus is under control. So the Chinese stock market is recovering.
Situation of the Global Financial System and coronavirus
The impact on the Global Financial System by the coronavirus is notable in the most important stock exchanges.
Regarding production, it has also been negatively affected since the most affected countries have been quarantined in order to avoid further contagion.
This measure of restrictions on population mobility as well as the closure of industries has a negative effect on the production of goods and services in the most affected countries
On the other hand, this global pandemic of the Coronavirus has an impact on the planet.
Well, we can see how the tourism industry has been severely affected. In this sense, international flights are mostly suspended. To this we add the border closures of the countries.
Without a doubt, it is a very difficult situation in terms of the economy and it will be reflected in the present and in the future of nations.
Sources:
https://foreignpolicy.com/2020/03/18/coronavirus-economic-crash-2008-financial-crisis-worse/
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