Recession, we may have not seen it  coming but here is why to worry.....!!

Analysis by  Twin Philemon 12:40 hrs E.A.T

The corona virus outbreak could be on the verge of creating a global recession ,a decade after the real estate woes triggered the 2007-2009 great recession. The Covid-19 which broke out in Wuhan caught the global attention in January and It has not been the same ever since spreading out to the rest of the world causing over 7000 fatalities.

After it came to attention, in a bid to stop its spread the peoples’ government of china decided to put Wuhan under a lockdown and limit travels within other provinces of the country. This put a halt to various economic activities as panic shock waves were sent through the population. Manufacturing and production in industries came to a stand still as labour stayed at home in enforcement of the government policy.  Effects later started spilling out as the global supply chains were disrupted an effect majorly felt by the auto industry.

Travel bans were effected, Airlines cut off flights to and from china but as the virus spread out, most airlines have shut down over 70% of their anticipated flights across the world leaving many operators to start counting losses. Despite a fuel price decline that arose when Russia failed to reach an agreement with OPEC, the industry recovery entirely depends on how quick the corona virus will be contained.
Restaurants, hotels, recreation parks and cinema halls have also shut down as the social distancing policies took effect leaving many employees and service providers stranded and jobless the same circumstances facing the airlines crew and suppliers.
Taking voluntary unpaid leave means individual have to meet their day to day needs by withdrawing part of their savings a move that creates uncertainty in future.

In the wake of the virus, the wall street began to feel the impact as investors started responding to the outbreak collapsing the markets as they opted to transfer their savings to safety buffers. The once bull market , NYSE major indices have all dipped into a bear market on some instances halting the trading on the stock exchange. Stocks of major companies esp airlines and banks have also hit the bear market declining even way below the 20% fall from their peaks. With the situation not easing the Fed injected in cash to keep the market afloat but this has seemed to have a little impact as they have continued to underperform.

Across Europe, the world’s eight largest economy is under a complete lock down after the disease hit the industrial area of Milan and have a recorded over 2100 fatalities the highest by any country after china. Companies like Chrysler renowned for the jeep cars have shut down the factories till further notice.
Recently the US president put a travel ban on the movements from Europe a move seen by many as major disturbance to the trade. However European governments are trying hard to contain the virus a move that has seen their greatest export to the world the European soccer come to a halt till earliest 3rd April.

Television channels and programming that largely relied on live sports event airing haven’t been spared as they struggle to create content for their clients and customers who are seated back at home as lock downs and quarantine policies take effect.
One of the booming industry reportedly is the gaming world as schools were forced to shut and close, students are back in holidays and yes they ought to enjoy themselves.

 But with all these conditions at hand , what lies ahead for the global economy

Many analysts in the industry are saying the economy could be headed for another recession though it would be short lived because the cause is not from the major collapse of systems but rather a factor that has hindered the operations of the system.
Online enyclopedia describe recession as a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
With the first quarter coming to an end, we estimate the effects to spill over into the next quarters as countries like china struggle to return to business as usual but other coutries could be headed for an economic shut down in the next quarters.

As normal average Ugandan living off in the village side somewhere in masaka , one may think I may not feel the effect but why not Uganda operates an open economy majorly exporting agricultural products and importing roughly half of my daily needs.

Wash your hands, keep the social distance and well listen to advice from the ministry of health.

You may also wish to read through this article Corona virus: a global-economy-disaster published a month ago..

Grafti  Art with words: Corona scare