How are the financial systems of different countries responding to the pandemic?
The inevitable restrictions associated with the coronavirus pandemic have led to an economic coma in many countries. And this is regardless of how stable the financial system was for each of them before the global crisis. Entire industries are now in a frozen state. Therefore, the only thing that can help people survive in such a situation is well-thought-out measures on the part of the state. If the authorities are able to provide the people financially and provide decent material support, it is quite possible that it will be possible to adapt faster to difficult circumstances.
Today, the most unstable situation is in the United States and Europe. That requires immediate decision - making by management structures. So, the measures taken by President Donald Trump helped to accelerate the growth of the real sector, as well as increase the number of jobs. In America, this problem is in the first place, since, first of all, such drastic changes have affected people with hourly wages. In just a week, the state received 280 thousand applications for unemployment benefits instead of the expected 220,000.
Trump confidently continues to say that the US economy is at its historical maximum for the first time. Despite the fact that Bank of America in March recognized the onset of a full-fledged economic decline, which according to analysts ' forecasts will be the most destructive in the history of the country. Deutsche Bank, which expects GDP to fall by as much as 12%, has a similar opinion on this issue. All this will eventually lead to terrible consequences, where the number of vacancies will be reduced by about a million, and 3,500,000 people will lose their jobs completely.
In order to mitigate the consequences of the epidemic in the financial market, the US authorities traditionally use the issue. For example, the US Federal Reserve purchases government bonds and mortgage-backed securities. Rates on bank loans are also reduced, thanks to the establishment of an almost zero discount rate. The US Treasury has already announced that the authorities are ready to allocate up to $4 trillion to support the economy.
The strongest economic stagnation awaits Europe. There, the business activity index has already reached a historic low, falling below the level of 1998. Such indicators give unpleasant forecasts – Germany's financial losses can reach up to €729 billion. And if the entire industry is suspended for just two months, the country's GDP will fall by 11.2%, and 1,800,000 people will be unemployed.
One of the most positive is the situation in China. It was there that the rapid decline of the economy changed its perspective to the opposite, and the indicators rapidly crept up. However, this still does not guarantee long-term stability in the country's financial market.
Based on the statistics provided by Morgan Stanley and Goldman Sachs, the global economy will not go into negative territory in 2020. But it will not grow by 3.3%, as previously expected by the International Monetary Fund.