The year 2020 looks set to be defined by the global coronavirus outbreak. No matter where you live, it’s impossible to ignore the effect that COVID-19 has had on public safety measures and social activity. But in the big picture, the long-term economic impact of the pandemic may prove to be even more significant and far-reaching in its implications. Even in the early weeks of the outbreak, many companies were forced to suspend manufacturing operations. Now that the virus has spread across the globe, major cities have enacted lockdown measures to ensure public health, further slowing down economic activity. As leaders across the world explore different solutions to the problem, here’s what you need to know and how to adjust.
Exploring different approaches
Even if you can pinpoint the cause of economic recession, successfully dealing with the fallout may require different approaches. Thus, today’s governments are working on different options; financial stimulus to increase spending, lowering interest rates to zero, providing tax credits or debt relief. Because each person faces their own unique challenges, and individual needs in turn differ from those of businesses, each proposed solution will have different implications for everyone affected. Most likely, a combination of measures will end up being necessary to combat the problem. In the same way, you can find different approaches to address individual financial needs. Go over the previous months’ budget and identify which items of expenditure can’t be sustained. Changes in working arrangements may open up the possibility of a home-based side job. Debt consolidation and refinancing may provide significant relief in a time of lowered interest rates.
Consider Online Options – Work From Home
Mileage may vary
Previous financial crises have shown us that every economy may respond differently to the same measures. During the 2008 recession, for instance, aggressive financial stimulus packages enabled rapid recovery in the US, China, and Saudi Arabia, among others. However, some Asian nations didn’t respond as quickly to a large package. Developing countries might not be sufficiently prepared to translate stimulus into timely relief. This may have changed for some, with better infrastructure and development over the years; fintech companies in the Philippines now help facilitate the approval of loans, for instance. But individual countries are still networked in the global economy – the long-term outlook for many will be dependent on how effectively the likes of China or India recover this time around. If this has particularly significant implications for your line of work, this could be the time to invest in yourself – take online courses, learn new skills, and diversify your opportunities moving forward.
Liquidity is crucial
The major factors underlying a successful economic response are often identified as timeliness, targeting, and duration. This is where the nature of today’s problem can complicate matters. Many remain uncertain as to whether a month-long lockdown will be sufficient to contain the outbreak, and the possibility of future ‘waves’ still exists. This uncertainty makes it vital for both individuals and employers to have increased liquidity. Businesses need to seek flexible funding and relief from rent and other costs in order to keep paying employees, who may be doing some work from home, but probably not as much as before. Employees in turn need liquidity in order to pay for basic goods and emergency expenses.
Knowing that economic solutions are being explored and urgently put into practice will bring hope to everyone, but the crisis remains unpredictable in both duration and scope. It’s critical for both individuals and businesses to budget wisely with a long-term outlook, secure funds, and continue to make their needs known by voicing concerns to local authorities and decision-makers.