Did you know that there are nearly 200,000 confirmed cases of coronavirus infections all over the world, at the moment of this writing? Nearly 8,000 of the patients have died and almost 7,000 are in critical condition. The coronavirus spread has taken everyone by surprise and it forced countries to close borders in an attempt to contain the virus.
But apart from taking the lives of certain patients, what is the economic impact of coronavirus on our modern world? How does it affect global GDP since most governments advise citizens to stay indoors to prevent the spreading of the virus? Keep reading to find out how coronavirus affects the economy of the US!
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Closed Borders and Travel Bans in Many Countries
One of the worst things about the coronavirus is that it can easily spread through the air. Scientists say that even breathing the same air as an infected person can increase your chances of getting the coronavirus. That’s why the disease can spread so quickly and many countries across the world have decided to ban traveling and close their borders as a preventative measure.
This can have a profound effect on the transportation industry. Airline companies have little to no passengers and they might experience substantial decreases in revenue. Since some countries have also banned local transportation, passenger trains don’t travel between cities anymore, so the railroad industry also suffers massive economic losses.
Most Large Events Are Canceled
Since coronavirus can spread so easily through the air, the governments have banned large events and gatherings to prevent new infections. As a result, sporting events, concerts, and other types of gatherings are no longer held in the venues or arenas of major cities across the world. This leads to massive financial losses for the organizers of the events as well as for advertisers and supporting companies.
A plethora of businesses is also linked to such large events as they produce merchandise that can be sold at low prices. Since these events are postponed indefinitely, these companies have no revenue and they might have to deal with significant economical problems in the upcoming months.
Restaurants and Bars Are Closed
Following the same principle of avoiding large gatherings of people, a plethora of countries has ordered the temporary closure of catering businesses. As a result, you might not be able to go to a restaurant to eat something or go to a bar with your friends for a quick drink. The owners of these restaurants and bars will have little to no profit in the upcoming weeks, although some of them can still deliver at home.
The same story is valid for gaming venues, coffee shops, casinos, betting establishments, and so on. Most of these businesses are not permitted to gather a lot of people and they are simply closed for a while, causing a financial strain on managers and owners.
Many People Are Forced to Work From Home
Countries such as Italy and Spain are currently under complete lockdown. Business owners and managers have asked their employees to stay home until the spreading of the virus is stabilized. Since public transport is also significantly reduced, some workers arrive at their jobs with their own cars or are forced to work from home.
Working from home is a great way to maintain the productivity of the company, but it’s only a temporary solution. Many people don’t have adequate equipment at home to work at full productivity, so the economic growth of each business is slowed down. Since little to no work is produced, business owners are forced to burn through their savings accounts to pay their employees who are unable to work during the coronavirus crisis.
Most Shopping Malls Are Deserted
The shopping malls in various cities contain hundreds of small outlets and shops that sell different types of goods and services. However, since most people stay at home because they’re afraid of getting infected with coronavirus, these shopping malls see little to no customers every day. Most of them are closed and those that remain open have reduced schedules to prevent crowds at peak hours.
Major retailers such as Nike are closing dozens of stores across the US and other countries. This is an unprecedented move aimed at preventing the spread of coronavirus. Since the closure can last at least two weeks on average, these big stores will experience massive drops in revenue because they won’t make any sales.
Healthcare Costs Will Be Significantly Increased
Since thousands of new cases of coronavirus appear worldwide every day, the healthcare system is getting overburdened slowly but surely. Doctors and other medical staff are working overtime to treat patients that come in on a regular basis. The medical supplies are limited and hospital beds are getting occupied every day. Most governments have allocated more funds to the healthcare system in an attempt to cope with the enormous number of patients who are hospitalized every day.
At the same time, various research centers and clinics are working intensively to create and test a reliable vaccine for coronavirus. It might be possible to create one very soon, but testing the vaccine can take months or even years. That’s because the vaccine needs to be tested on animals first then on humans of different ages. The researchers also have to wait a while to see if there are any side effects to the vaccine, before it can be mass-produced and distributed across the globe.
Now You Know How Powerful the Economic Impact of Coronavirus Can Be!
As you can see, the economic impact of coronavirus on our modern world can be profound and long-lasting. The stock markets are falling with each passing day and governments will eventually spend billions of dollars trying to compensate firms for losses caused by the coronavirus.
Still, there are numerous brilliant minds in this world who can make a difference and help countries come back from such difficult financial times. Make sure that you keep reading our blog to stay informed on the latest financial news and learn how to mitigate the economic loss caused by coronavirus!