- Coronavirus may cause global economic damage that may be more serious than the global financial crisis of 2007-09
- The Economist, however, predicted that the world may recover fast from the damage if governments put appropriate measures in place
- Also, Joachim Fels, an economist, said it will take aggressive actions from governments to avoid a global economic collapse and depression as a result of Covid-19
A new analysis of the global economy by the Economist has predicted that though coronavirus pandemic poses a serious threat, the world can bounce back immediately if the governments take appropriate actions.
The Economist, however, said it may take years before the full extent of the economic blow from Covid-19 can be fully estimated.
As the coronavirus pandemic is forcing a shutdown, The Economist said the world may be facing an unprecedented economic collapse.
The economic think-tank said some analysts predicted that the growing economic disruptions and market panic may lead to an economic collapse more serious than the global financial crisis of 2007-09.
The global financial crisis was a severe worldwide economic crisis. Many economists considered it as the most serious financial crisis since the Great Depression of the 1930s.
Joachim Fels, an economist, said it will take aggressive actions from governments to avoid a global economic collapse and depression.
However, citing history references, The Economist held that the world can make quick recoveries from the economic damages, though such recoveries are not fully guaranteed.
"How do countries fare after suffering such economic blows? Recoveries are occasionally quite rapid. At the end of the world wars, a few economies experienced near-immediate bursts of growth—partly, but not always, because of rebuilding. The beleaguered Italian economy grew by about 35% in 1946. By 1949 it had already recovered all the ground it lost during the war and then some. The German economy shrank by a staggering 66% from 1944 to 1946, then grew at an annual average rate of 12% over the subsequent decade," The Economist stated.
The think-tank, however, noted that the economic recoveries from the world wars were not robust in Germany and Austria.
Nevertheless, The Economist said the world will be able to bounce back once the coronavirus pandemic is brought under control if governments learn from history and put in place robust economic measures.
"Even the mildest brush with the coronavirus could prove economically destructive if governments are reluctant to provide enough stimulus. The world should be able to bounce back to growth once Covid-19 is brought under control. It has only to avoid the errors of history," The Economist concluded.
Meanwhile, apparently worried about the spread of coronavirus in the country and its impact on the economy, the Nigeria Governors’ Forum (NGF) said it is strategising how to address the challenges posed by the deadly disease.
The NGF noted that part of the measures to address the challenge is the decision to constitute a sub-committee to be headed by the Kaduna state governor, Nasir El-Rufai.
Legit.ng gathered that the committee was set up to comprehensively review the trend and advise state governments on the set of actions required to address challenges in the economy.
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