Effect of COVID-19 on Economy and Business (Essay Sample)

Effect of COVID-19 on Economy and Business By: Gladys Perocho 854710238061500COVID-19 outbreak has affected every aspect of human life. Its effects are extraordinary and felt around the world. The world struggles with the alarming health crisis presented by the rapid outbreak of the coronavirus. In addition to the human impact, the global economy and financial markets are also severely affected. Its spread has left national economies and businesses counting the costs, as the government struggles with new measures to address the spread of the said virus. The labor markets, economies and enterprises including global supply chains are greatly affected which led to widespread business disruptions. The World Health Organization in March of 2020 characterized Covid-19 as a pandemic pointing to over three (3) million cases and 207, 973 deaths in 213 countries. Due to loss of life, reduced productivity, business closures, trade disruption, and decimation of the tourist industry, significant economic impact has occurred around the world. In addition to the impact on productive economic activities, consumers typically changed their spending behavior mainly because of decreased income and household finances. Industries such as tourism, hospitality and transportation have suffered significant losses due to reduction in travel. Restaurants and bars, travel and transportation, entertainment and sensitive manufacturing are among the sectors that are the worst affected by the Covid-19 measures. As reported by the Philippine Institute for Development Studies (Abrigo et al 2020), the Philippines may suffer economic losses between P276.3 billion and P2.5 trillion due to the COVID-19 pandemic. The most affected business sectors will be manufacturing, with losses between P82.1 billion and P855.2 billion, wholesale and retail trade, with losses between P93.2 billion and P724.8 billion, and transport/storage/communication, with losses between P11.7 billion and P124.3 billion. Abrigo et al (2020) also estimated that, if the ECQ continued to May 2020, it would potentially cost the Philippine economy at least P150 billion given the decline in household consumption. The restrictions imposed in the country to limit the spread of the virus among people, such as quarantines and social distancing, have led to distortions in the system of supply and demand for goods and slowed the country’s economies. The repercussions of the pandemic have been felt across all economic sectors an...