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Research About

To What Extent was The World Economy affected by

By : Atheer Mohammed

ID : 439804021

Supervisor :
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Thesis :

Almost all countries around the world are infected and the number of infected people

and deaths are increasing rapidly. Unfortunately there are disastrous impacts on all fields

of business and industries .There are many losers because of the restrictions and health

measurement taken by the governments to keep the social distance. The disruption of

factories , airports , transportation , sports , restaurants , cinema and movie making ,

tourism , universities many different industries which led to the contraction in the

national and individual income has its bad effects on the global economy ,heavy losses are

being registered on the international markets including the problem of liquidity and

unemployment . The issue of the supply and demand contraction and its sharp impact on

the world market has been tackled also in this research . Globally, the coronavirus shock is

severe even compared to the Great Financial Crisis in 2007–08..Policymakers must

support vulnerable households and smaller businesses to mitigate the impact of this severe

shock. Ironically, there are some of the gainers as E-commerce and Pharmaceutical

industries . The research presents some solutions that should be taken to soften the

collateral impacts of this crisis on the world economy as well as some of anti-crisis

socioeconomic procedures must all governments adopt to counteract the sharp economic

downturn.

The COVID-19 pandemic is set to result in the worst recession since the Great

Depression in 1920s.Revisions to the IMF's April forecast now predict global output to fall

4.9% this year. The strength of the recovery is uncertain. Compared to our April World

Economic Outlook forecast, we are now projecting a deeper recession in 2020 and a

slower recovery in 2021. Global output is projected to decline by 4.9 percent in 2020, 1.9

percentage points below our April forecast, followed by a partial recovery, with growth at
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5.4 percent in 2021. The GDP projections imply a cumulative loss to the global economy

over two years (2020–21) of over $12 trillion from this crisis.

The Saudi government has responded boldly and swiftly to the COVID-19 pandemic

and has been very active in communicating with the public through social media

awareness campaigns. It has set up various support systems, including call centers and

medical care for all affected, regardless of their residency status. As a result, people have

dramatically adjusted their daily routines, with most activities, and hence the spread of the

virus, substantially reduced. Saudi Arabia has taken strict measures to contain the spread

of COVID-19. Consequently, The V2030 IOT scenario analysis shows that the negative

impact of the COVID-19 economic lockdown on overall GDP ranges from -4.6% to -9.5%

compared with the baseline level. This negative impact is partially offset by the

government’s fiscal countermeasures, resulting in a positive counter effect of some 2.6%

in real GDP. Assuming a hypothetical economic expansion of 2% in a world in which

COVID-19 did not occur, the estimated annual decline in overall GDP ranges from -0.4%

to -5.4% in 2020. The NTL approach allows us to estimate an immediate annual decline in

overall economic activity of -7.9%, regardless of the government’s countermeasures.

Objective of the Research Project

To investigate the comprehensive effects of Covid-19 over the World economy and to

find out who are the big losers and the beneficiaries as well

Research Hypothesis

If the pandemic of Covid-19 last for more time, there will be more restrictions , then

severe impacts will affect the world economy .

Research Question :
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 To What Extent was The World Economy affected by Corona Virus?

 Who are the most losers and beneficiaries?

 How was the economic situation in the KSA after this crisis ?

 What are the good benefits for the planet?

 What are the suggested solutions?

 When will the recovery predicted to be ?

Research Problem

The problem lies in that this new virus of coronavirus has spread world widely and

became the worst threats ever that happened the last hundred years . It has become a

nightmare that the whole world is facing and sharing. Unfortunately it has very serious

impacts on all aspects of life, but we will focus on the economic impacts that resulted from

the wide spread of this virus . In this essay we will discuss the impact of this virus on the

global economy with its all various fields of life. Then we will discuss the best

beneficiaries economically in this situation. Finally we talk about possible solutions to get

out from this economic crisis or at least soften the collateral impacts on the economy

Literature Review :

At the time of this review pandemic virus covid-19 has infected millions of people in the

world and caused hundreds of thousands confirmed deaths, but data regarding the the

death as well as the economic impacts are scary. The purpose of this review was to

evaluate the current literature that includes the bad side of the economic impact as well as

the beneficial one. The goal of this research is to survey the emerging and rapidly growing

literature on the economic consequences of COVID-19 and governments response through

descriptive and qualitative research. This research provides an overview of the data sets

used to measure social distancing and COVID-19 cases and deaths, reviews the literature
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on the impacts of the curfew and lockdown .Moreover, This crisis will also generate

medium-term challenges. Public debt is projected to reach this year the highest level in

recorded history in relation to GDP, in both advanced and emerging market and

developing economies. Countries will need sound fiscal frameworks for medium-term

consolidation, through cutting back on wasteful spending, widening the tax base,

minimizing tax avoidance, and greater progressivity in taxation in some countries.

Research Methodology

In this research both qualitative and quantitative methods were used , Moreover ,

verified data collection was done through archival research as well as observation and

documentary analysis . All the data were collected from archival certified documents that

has been analyzed thoroughly

Introduction:

The impact of the coronavirus is having a profound and serious impact on the global

economy and has sent policymakers looking for ways to respond. Success in containing

the virus comes at the price of slowing economic activity, no matter whether social

distancing and reduced mobility are voluntary or enforced, at the height of the outbreak,

many cities enforced strict curfews on their citizens .The matter became worse when the

disease began spreading rapidly around the world . The whole world countries applied

strict limitations , many cities applied strict curfews to their citizens. Air ports stopped

working , Banks , Tourism declined to zero percent . Travel agencies around the world

locked down .

Unluckily there would be three main sectors of the world economy will be sharply

harmed, they are : finance demand and supply . Concerning the demand branch a

combination declined income and a state of horror of contagion will result in lower
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spending . Though they can be resolved by more generous government spending , the

net demand effect is expected to be declined sharply in the few next months .This might

be increase by more negative supply consequences in relation to a sudden stopping in

manufacturing products in the most infected countries these declines will in turn cause

large spread block down of factories because of the lack of the essential inputs, even in

the countries that are less affected with the virus . Finally, This doubt to get over this

virus and the great terror of it will lead also to the flight of liquidity, the financial markets

stress will affect badly the global economy. Sooner or later more collateral changes will

occur in most famous exchange markets in the whole world wide

A remarkable increase in global unemployment rate will be inevitably happen. The

world bank predicts that the epidemic COVID 19 will definitely affect both old people

with bad health conditions and young people who are more vulnerable to decreased labour

demand , Even women who are working at big number within this sector , will absolutely

affected badly . The suspense of thousands of factories around the world , retails shops ,

the economic crisis that hit the field of tourism , all these will result in a sharp decline

in the number of labours and high percentage of unemployment rate .

Concerning The impacts of the virus on the Saudi economy , Saudi Arabia has taken

strict measures to contain the spread of COVID-19 and has implemented the following.

• A nighttime curfew for 21 days in most cities

• A 24/7 curfew for Mecca and Medina

• Domestic and international travel restrictions

• Suspending prayers at mosques

• The closure of all schools and universities

• The closure of shopping malls, except for groceries and pharmacies

• Suspending government and private employees’ attendance at workplaces

The covid -19 coronavirus epidemic has made global markets swinging because

investors whether they are national or foreigners boost for how the spread of the virus will

hinder global growth. Still, there are some positive spots in the world market, There are

some beneficiary and industries who gained a lot from the current situation Namely :

E-commerce benefited at great deal because of blocking down of physical stores

and the horror of the public places speeded up the online shopping process . people also

are afraid of queuing up and mixing with crowds, so they preferred shopping online which

is safer .People around the world were told to apply social distancing to stop the spread of

the virus and of course this will result in cancelling trips, working from home, ordering

food delivery, and stocking so much food and toilet paper to limit the going out .

Because many people stay now at their homes , the began to search for

entertainment ,so Netflix and Starz play sites benefited a lot from the current

situation .Another example is Amazon website which of course on of the most famous

online shopping in the world and of course it made good use of the situation . they

provide all cleaning supplies , detergents , household accessories , while the demand for

these online increase , their profits increase as well .some economic thinkers think that

Amazon will be the most gainer from the outbreak of corona virus .

The most important concern for most governments and the global community is to

stop people from transferring the disease and to treat those who were affected. Much

expenditure health can save thousands of lives both at home and worldwide. All

governments must protect people from the worst economic effects of this global virus.

these governments must protect people from being bankrupted and lose their source of
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income. All workers who work in restaurants or in the field of tourism or who working

factories that shut down because of a long period quarantine will need instant support to

overcome the crisis.

Ways that can the governments do to protect and help people :

1. By Spending money to prevent, check , control, treat, and confine the corona

virus, and to provide essential services to those people who have been quarantined and to

the industries and businesses which were badly affected. .

2. By providing instant money allocations to people whose factories or firms were

suspended for longer time , .

3 - By giving money subsidies to people or firms to help constrain coronavirus contagion.

4 - By providing as much as liquidity particularly for vulnerable groups. Many countries

provide the unemployed youth and hourly workers to help them during their stay at home .

5 – By reducing taxes for people factories and businesses who can’t afford to pay, this will

relieve the burden over them. the sectors that benefited from these reductions are ,

transportation sector , tourism industry , contacting companies , food and beverages and

hotels.

6 - By devising a business plan, making sure that all services will be delivered on time

electronically to all sectors.

The above measures are considered the most perfect ones that can be taken until now

to soften the severe impacts of COVID- 19 on the national and the global economy .

These will help the most affected firms or people and at the same time will help to hinder

the spread of the deadly virus.

Conclusion

Until present different apprehensive and perplexing feelings caught the world

capital markets because of the continual and dreadful spread of the outbreak of corona

virus COVID 19 . The numbers are unfortunately are increasing very rapidly , the thing

that made severe consequences on both national and international economies and most

countries and the world economy as well . The feelings of uncertainty and the ignorance

of the deadline of the availability of the vaccine created a depressing atmosphere among

all economists even the price of the oil barrel fell down sharply until it reached 20 cent ,

the thing that will affect badly on most oil- producing countries . The worst thing that most

countries began to give up and relieve the strict measure they began to stop the spread of

this virus fearing of inevitable bankruptcy , inflation , or recession . All scientists pray that

no other sharper second wave may break out again in the next winter , it will be the last

straw for the world economy. The COVID-19 pandemic pushed economies into a Great

Lockdown, which helped contain the virus and save lives, but also triggered the worst

recession since the Great Depression. Over 75 percent of countries are now reopening at

the same time as the pandemic is intensifying in many emerging market and developing

economies. Several countries have started to recover. However, in the absence of a

medical solution, the strength of the recovery is highly uncertain and the impact on sectors

and countries uneven.

Research limitations

The main problem I have faced in conducting this research that we are dealing with a

rapid spreading virus, thus the number provided are varying everyday as well as the

infected places. Moreover the measures taken by every country are different also that made
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the effects differ from one country to another . The main challenge was the onset of the

.second flow of the virus outbreak which may turn all statistics upside down

Bibliography

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TheImpact Of The Coronavirus Shock: Evidence From Real Time Surveys

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Output Table: Combining Macroeconomic Forecasts With the RAS Method.” KAPSARC

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3-Miller, Ronald E., and Peter D. Blair. 2009. Input–Output Analysis Foundations and

Extensions. New York: Cambridge University Press.

4-United Nations, the European Commission, the OECD, the International Monetary Fund

and the World Bank Group.2008. “System of National Accounts.”

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against-coronavirus

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markets-in-6-charts.html

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