After the covid situation everyone is wondering how to make their economies local. All economies around the world are trying to de risk their supply chains and take their economies free of foreign trade and encumbrance. It is also a way to protect your country from trade wars. Theres going to be a lots of focus on digitisation. Most services like education, physical training are going to go digital.
rates of interest are going to be extremely low. The demand for social insurance os going to be very high as populations of people have realised how it is important to have a strong social security and extremely strong healthcare systems. The need to have a strong people driven Government will be the need of the future.
In the past theres has been localised shocks which have affected the supply chains and consumption patterns of countries, however they have never been a structural change. The ability or willingness of people to travel or go digital are the ones which are affecting businesses and it will take more time for the economy to revive than it did with any of the recessionary periods in the past.
The geopolitical scenario will continue to have more localised effect and the trade wars will now be more difficult to resolve as the pandemic has hit exactly at the time when these were just coming into resolve mode. Globalisation was slowing even before COVID with USA being at its peak of trade wars. There could be a V shaped recession where the GDPs will decline sharply and then go up again as lockdowns are lifted or as a vaccine is found and people try to make up for the lost time to make it jump back to normal.
Comments
Post a Comment