Friday, 24 July 2020 00:00

Threat of Recession from Covid-9

Written by 
Rate this item
(0 votes)

After fighting against Covid19 pandemic since December 2019, many countries are now entering the recession stage.

Australia announced that the country's economic growth would shrink and the budget deficit would be the largest since the Second World War. This condition occurs because of the impact of the corona virus pandemic that infects the world. Quoted from AFP, the Australian government revealed that the country's Gross Domestic Product (GDP) contracted 7 percent in the second quarter of 2020 or the April-June period. This contraction has the potential to push Australia into the brink of economic recession for the first time in nearly three decades. Finance Minister Josh Frydenberg said the budget deficit would surge and the Australian government had rolled around 289 billion Australian dollars in economic stimulus to protect the country from the effects of the pandemic. This funding includes support for workers, businesses and retirees. Australia's unemployment rate is currently the highest in two decades at 7.4 percent, expected to peak at around 9.3 percent in December 2020.

Apart from Australia, South Korea also officially experienced a recession in the second quarter, which has been the country's worst economic downturn in more than two decades with exports having fallen sharply due to the corona virus pandemic crisis. Singapore is also officially hit by a recession. The country experienced minus economic growth for two consecutive quarters due to the Corona virus (COVID-19) pandemic.

The Executive Director of the Institute for Development of Economics and Finance (INDEF), Tauhid Ahmad in Jakarta, said that those  estimated to experience a recession in the second quarter of 2020 are the European Union (EU) countries.

Recessions can affect a number of people who would  lose their jobs or are more difficult to get new opportunities and promotions. There will be fewer vacancies available for new graduates looking for a first job. Those who continue to work may not experience salary increases, have to work longer hours or receive salary deductions.

It is hoped that governments around the world are ready and able to face the economic recession that has occurred due to the Covid 19 pandemic. So that the adverse effects caused can be minimized  and not prolonged.

Read 80 times Last modified on Monday, 24 August 2020 10:35