Impact of COVID on Global Economy

Global Economy

Table of Contents
INTRODUCTION...........................................................................................................................3
Effect of COVID on globalisation...............................................................................................3
Outcome of Corona faced by establishments and businesses worldwide....................................4
Roles, responsibilities and weaknesses of financial institutions over the economy....................5
Theories related to international trade.........................................................................................6
Impact of COVID on digitalization.............................................................................................8
Roles of supranational economic governing bodies....................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
The global economy is the economic system which consist of all the humans exist in the
world, it consider all the financial human activity carried forward between national and
international countries and all of their functions like, manufacturing, monetary management,
consumption, trading of commodities and financial transactions. It is refer to the inter relatedness
and dependency of various business activities that take place among different regional, national
or foreign nations. It also help countries in developing the differentiation in products or services
they have in plenty and trade them in order to earn sufficient fund which turns out to be valuable
for t hem as well as the country they exported in. The following report will be a detailed study of
the impact of COVID pandemic and how it reflected upon the international trade, globalisation
and business activities worldwide.
Effect of COVID on globalisation
Globalisation refers to transforming the whole world into a single entity which doesn't
have any cultural, financial or political boarder basically to see a world as a planetary village. It
encourages the import and export of goods, products, workforce, flow of currency, exchange of
information and to develop and exchange technological advancements and knowledge.
Internationalisation have to face many political and legal ups and downs and continuously
working towards coping from all that barriers (Auerbach, Gorodnichenko and Murphy, 2020).
But after the drastic spread of coronavirus it is vastly effected and struggling to cope from all
that loss of human lives, capital and business shutdowns, economic downfall etc.
Global financial situation: UN & UNESCAP have conducted their yearly economical and social
study and they have concluded that the pandemic have reflected some serious impact on the
international economy. The meeting is conducted to done a discussion on various legal and
juridical factors and what all are the measures to be taken into consideration to manage this
repercussion which world have to face due to this disastrous pandemic. They gather together to
work on a collaborative initiation to form specific strategies which can be carried out to balance
out the monetary condition of the world economy.
Developed and developing economic nations are facing problems: The emerging nations and
their businesses are highly dependent on the trade and they tend to outsource the resources. They
have to face a severe challenge and backdrop as government are sealing countries boarders and

following protectionism strategy to avoid the spread of virus. Due to restricting cross boarder
dealings exporting of essential resources is stopped which hinders the functionality of enterprises
as to fulfil one operational activity which needs several resources.
Disturbance in worlds value chain: COVID have destructive consequence on business and
establishments around the world whose profitability and production is totally dependent on the
cross boarder countries and their distribution channel. For example: China is known as the
worlds one of the largest manufacturers and also the hot spot of corona virus because of that
those companies and regions have faced huge loss as they were dependent on the supply chain of
China.
Restriction on travel and tourism: Leisure and tourism industry is mostly effected as
government totally restricted the movement of people from their own town or locality, so its
impossible and illegal for that specific time to move out from their homes to prevent the spread
of corona (Beck, 2018). That results in temporary shut down of hotel and travel industry (Sharif,
Aloui and Yarovaya, 2020).
Outcome of Corona faced by establishments and businesses worldwide
The whole world no matter if the country is small or big they have not spared with the
deadly effect of this virus, many lives have lost world have to face not only financial crisis but
thousands and lakh or people have lost their lives and families, people and their businesses have
faced temporary and permanent shut downs, lots of people have lost their employments.
Underneath the impact on various international business is discussed:
Oil and natural gases: The fuel and gas industry have to face downfall as travelling and
transportation has stopped so the demand of oil and fuel is very low, and people staying at home
decreased the need of natural gases. Many countries have imported their liquid petroleum gas to
other regions because their storage tanks are overloaded due to stoppage in consumption or low
consumption.
Metal industries: The overall need of commercial metals is decreased as all the industrial and
factories functions and manufacturing units have shut down their work.
F&B industry: People are scared to death to consume any packaged or processed food or eating
out is also avoided by people to prevent from themselves from the corona virus (Bickley and et.
al., 2020). So all the restaurants and bakeries and food outlets have faced downswing as people