Question

Advantages and Disadvantages of Covid-19 Of Our Economy

Answer 1

Answer:

What is likely to be the impact of the COVID-19 pandemic on developing economies? It is difficult to make predictions, because much will depend on the spread of the disease, especially in Africa, Latin America, Asia and the Middle East, and the measures various Governments will take in the coming weeks and months.  

This two part article looks at possible economic impacts and what actions may be required to minimize disruptions on the poor and vulnerable. The first part looks at short term actions, whereas the second will look at possible medium to longer term developments.  

In the short term there is likely to be a sharp drop in domestic consumer demand in most developing countries.  

Demand for food, medical assistance and other essential items may rise, but this would be more than offset by lower demand for non-essential goods such as apparel and various services.

Demand would also fall due to other factors such as foreign buyers delaying or withdrawing orders; tourists, both local and foreign, canceling trips; and the declines in the stock market which erodes peoples’ wealth and their willingness to spend.

For countries with large numbers of overseas workers such as Philippines, India and Pakistan, or with large diasporas such as Somalia, remittances would slow down due to layoffs and delayed salary payments in Europe, the Middle-East and USA where most of these people live and work.

Lower overall domestic consumer demand will have a negative impact on production and employment. The drop in consumer demand may have a lower effect in manufacturing, where companies could, if they have access to credit, build up stocks of finished goods rather than reduce production and lay off staff.  However, the effects on the small-scale services sector are likely to be dramatic.  

Explanation: