(VOVWORLD) - COVID-19, which has already caused an historic economic and social disruption, is forcing every country to take drastic measures to mitigate its devastating impact and stave off an imminent economic depression.
 The European Central Bank head office in Germany (Photo: fxstreet) |
According to the World Trade Organization, world trade is expected to shrink 13 to 32% this year as a result of the COVID-19 pandemic. Some half a billion people are expected to fall into poverty.
Major economies have implemented massive stimulus measures to pull themselves back from the brink of a severe economic depression.
Emergency economic efforts
The European Central Bank has endorsed a stimulus package worth 130 billion USD to help its member economies. European Commission President Ursula von der Leyen has proposed at least 41 billion USD to fight the pandemic. Germany, Europe’s biggest economy, released a 576-billion-USD rescue package, the biggest ever in the country’s post-war history.
In the US, the world’s largest economy, President Donald Trump announced a distribution of stimulus checks to boost consumption and help people pay their rent or mortgage on time, or pay medical costs. The Trump administration is preparing a 1-trillion-dollar stimulus package to counter the devastating effects of COVID-19. In the first half of March, the US Federal Reserve twice reduced its emergency interest rate.
Since March 16, China has cut down the reserve requirement for banks, enabling banks to pump more than 78 billion USD from long-term reserves into the economy.
Japan’s Prime Minister Abe Shinzo said he will consider temporarily reducing Japan’s consumption tax. South Korean President Moon Jae-in has called for “unprecedented measures” to cope with the pandemic.
The Asian Development Bank and the World Bank have offered preferential loans for the most vulnerable countries.
Staying united
Some experts argue that COVID-19 could bring about positive changes in the global economy, such as diversifying supply chains and stockpiling more goods in warehouses rather than simply depending on China to be the “workshop of the world”. The pandemic has sent some businesses into bankruptcy but is motivating the creation of new business models. Shopping online to maintain social distancing is driving a boom in e-commerce and creating growth momentum in many areas.
As COVID-19 has turned into a global pandemic, the need for unity has become clear. Countries will need to reach a consensus on trade practices to prevent supply chains from being broken and quickly return trade to normal as the pandemic subsides.