How Coronavirus is affecting global economy?
Our Global economy is much more fragile than many of us realise. Looking at the current bloodbath in the Global market this seems very accurate once quoted by Robert Kiyosaki. Never realised that natural disasters or pandemic like this can cause so much of ripple on global systems.
Rapid national shutdown in China, EU , US and other developing countries has caused halt in production of products and services taking a toll on the economy. Thousands of people have lost their lives and many are in quarantine. This chain of infection needs to be broken and that seems and should be the priorities of the world. With unprecedented force and speed, a global economy has taken a pause. Quarantines, half-staffed factories and logistical bottlenecks inside China & other countries are affecting the movement of both finished goods & raw materials from these Chinese vendors that supply manufacturers across the globe.
Border closure, Flight cancellations and Quarantine has brought the complete system to a halt. However logistics is seen as one of front-line saviour to deliver necessary items to their doorsteps and thus avoiding exposure to masses. Expert delivery agents can deliver items to the end consumer by avoiding any mass meet as it happens in a retail / wholesale retail store. As necessary items like food, groceries, medicines are required on a day to day basis , these need to be delivered to citizens where certified & trained logistics executives come into play.
Manufacturers are panicking, suppliers from China have stopped productions. Where many logistics warehouses are on extended leave , many are sourcing parts to stock up inventories to meet up upcoming demands. Demand for health and hygiene related have skyrocketed and that is also a major challenge for the Govt, Industry and other public stakeholders.
|Coronavirus impact on economy|
The 10 most valued Indian companies lost a massive Rs 4,22,393.44 crore in market capitalisation last week, with heavyweights TCS and RIL taking the biggest hit. A third of the global market is shaved off with this pandemic situation. Crude oil prices have plummeted to lowest in the last 15 yrs. To add to more trouble is a fight between Russian & Saudi Arabia on crude pricing. Small, medium & Large Enterprises all are affected in one or other way. Industry is expecting a cut in GST and other taxation in near future to compensate for losses for masses.
Cascading effects of this pandemic will be a huge toll on lives and on global economy. shipping companies may rebound once restrictions subside and companies rush to fulfill inventories. There will be a slump in logistics movement for few more months however analysts expect a V shaped recovery after passage of this pandemic.
The best thing that companies can do is to simply know there's supply chain risks based on Supply from vendors and demand from the customer side, and preemptively develop mitigation approaches like slowing down productions.