COVID 19 RESESSION AND THE GLOBAL ECONOMIC LOSS

The coronavirus, which put the world under lockdown, pushed the global economy into the worst recession since the Second World War. The world economy is expected to shrink by -3.3% in 2020. In other words, an impact more than 2 times the damage caused by the Global Financial Crisis in 2009 is observed. According to many scientists, we are facing the worst recession of the last 150 years. So much so that Central Banks and Treasuries around the world have been mobilized to reduce the effects of this pandemic crisis with unprecedented policies and measures. However, research shows that despite all these measures, the global trade volume will reach a 15% contraction in 2020 and there will be a recession for two quarters.

 It is also seen that the global end result of the epidemic may be inflation. Because policy makers will ignore the capital markets and tend to stimulate the real economy. At the same time, the content of the packages to be implemented by the governments will be very different in design from what the capital markets have seen from central banks so far, and despite the all-out actions (tax delays, government loans and guarantees) made by all the governments of the world to support companies, massive bankruptcies and these bankruptcies will result. It is also seen that it will not be able to prevent domino effects and that global bankruptcies will increase by at least 20% in 2020.

Covid-19 has created major shocks in the world's leading stock markets. In the US, the S&P 500 index fell 33%. In the UK, the FTSE100 fell 34 percent in the same period. These decline rates are 38 percent -24 percent and 29 -17.5 percent for Germany Dax and Japan Nikkei indices, respectively. It is seen that the stock market shook twice in China, which was the first to experience the Covid-19 effect.

To sum up, a severe and deep contraction in the economy, an increase of over 10% in unemployment, a decline in stock markets approaching 40% give us the main components of the definition of "economic depression". The fact that these components took shape in a very short time points to a historically extraordinary situation.

While looking at the mere economic indicators of the recession created by Covid-19, the risk of food crisis started to be created by the coronavirus epidemic was overlooked. Now, all over the world, this risk has managed to sit on the agenda of discussions. Due to the global problem pandemic breaking the supply chain, both supermarkets' shelves are empty and the prices of the products on the shelves are increasing. Thus, the food regime of the low-income segment of the population begins to be negatively affected. When we look at the history of the world, we can observe that food crises are directly related to the increase of political tensions and instability within and between countries.

If we look at the global economy policies; We are entering a period in which the weight of the public will increase. In such periods, countries are shifting from liberal policies to protectionist policies. The first steps towards this had already been taken with the trade wars that had been going on for some time. With the virus crisis, this process can accelerate further and the scope of protectionism can expand. Both developed and developing countries can put in place various regulatory mechanisms to keep capital and investments in. However, expropriation policies may come into play to keep some of the large companies affected by the Kovid-19 crisis alive.

In the light of all these researches, we have entered a period in which the global economy tends towards an economical behavior. In the process of quarantine, all governments of the world; It is also expected to move towards more consumer-oriented policies to stimulate consumption (VAT cuts etc.). At the same time, it is important to have financial aid measures and support for companies to start re-exports to sectors that have suffered the most from the crisis: airline transport, hotels and accommodation and retail.

Finally, in the light of the above explanations, we touched on the financial dimensions of the covid-19 crisis on a global scale. But there is also the other side of madolya, which is its social dimension. In other words, the crisis may hurt not only in terms of production and trade, but also in social dimensions. Possibilities such as people preferring less holidays abroad, decreasing participation in international fairs and conferences and increasing xenophobia may be seriously on the agenda. In the event of such a scenario, the sharing of knowledge and experience between countries and people may decrease to a certain extent.

In other words, the Kovid-19 crisis can affect the global economic and social structure through different channels, as stated in the lines above. The impact of this shock wave on countries will be felt to varying degrees.

REFERENCES:

https://www.eulerhermes.com/en_global/economic-research/insights/covid-19-quarantined-economics.html

https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business

https://www.undp.org/content/undp/en/home/librarypage/crisis-prevention-and-recovery/the-social-and-economic-impact-of-covid-19-in-asia-pacific.html

https://www.oxfordeconomics.com/coronavirus

https://www.csis.org/analysis/global-economic-impacts-covid-19

https://www.researchgate.net/post/What_are_the_expected_economic_impacts_of_COVID-19_on_the_world_economy