Covid-19 shook the modern world like no other pandemic. The pandemic heavily triggered the Stock Market Crash in March 2020. In times of uncertainty, people don’t spend money ludicrously on houses and fashion. Instead, money is saved or spent on necessities such as food, healthcare, and sanitation. The duration of this dramatic crash was 48 days, but the consequences are still clearly visible.
We saw one of the most dramatic stock market crashes in history, and unemployment rates shot up to almost 20% in the United States. With most businesses forbidden from carrying out daily operations, firms had to lay off people to battle the rising costs of operations. Economic activity moved to an online platform, but there’s only so much work that can occur without actually going to an office. Even though there was a halt in production, there were irrefutable fixed costs which firms had to pay, irrespective of sales and revenue. Thus, firms decided to balance these costs by reducing the costs of labour, leading to one of the highest single-event caused rises in unemployment in history.
Most sectors suffered heavy losses. In India itself, the government approximates the lost revenue to be around ₹1440 crore just in 9 days of strictly-enforced lockdown. However, while the economy lost revenue from certain sectors, some industries hit the jackpot with this pandemic. Yes, the sanitation industry is enjoying one of the most substantial booms in sales and demand in history.
Medical professionals across the globe have urged people to purchase and wear masks every time they leave the house, and gloves and sanitisers have been purchased with demand which is rising exponentially. The best example here would be the N-95 Mask. Before the Covid-19 stir commenced, one could buy an N-95 for a mere ₹35. However, once the industry saw the market’s demand for these efficient masks, the prices rose to almost ₹250, which is around a 614% increase in the price of these masks.
Although the government revenue collected from this industry has been massive, the magnanimous losses have had a more significant impact on the economy. After the 2008 financial crisis, this may be the worst position in which the economy is.
The Covid-19 recession is disastrous for the economy, and it is still going on today. There are over 20 million unemployment cases filed around the world. Moreover, the corporate debt bubble, which started after the 2008 financial crisis, has grown faster than ever, and the valuation for this debt in the world is around $19 trillion. While the economy has suffered greatly due to this pandemic, the economy should regain its original position with new vaccines and technology emerging.
