With the economy in complete lockdown and the world going through worst affected lockdown in known memory, it is almost incomprehensible as to how the new normal will be post the civd situation. China has already gone through series of opening the economy but it is only running at a 90 percent capacity. What that means for the Chinese is that important parts of the economy is still missing and that they will have to wait for sometime for it to completely come back to normal as the hotel occupancy is down by 50 percent, 75 percent fewer people fly and consumer footfall is down by nearly 50 percent.
In Denmark and Sweden where there was never a complete lockdown too, the consumption has gone down by almost half as now in restaurants and shops people have to maintain a social distance and its even more difficult to have a normal restaurant or store visit. Governments have stepped in to try and keep the economy afloat, however as the lockdown ceases it will be clearer as to when and how to go about with the bankruptcies and have less than effective economy.
Even though banks are lending at an ever increasing rates we have to face it that an empty restaurant or an empty shop is not gonna be able to make rent and is eventually going to to closed down. The owner will first try to reduce his staff and then close down completely as it is extremely difficult to make those payments to banks and even low paid workers. This will increase unemployment levels leaps and bounds and consumption will go down as more and more people get unemployed.
In counties like India which are not consumption driven economies people tend to hold on to their liquidity even further, coupled with existing high taxes it will be extremely difficult for people to get their income levels high again. More over people will hoard the liquidity they already have due to economic uncertainty and the economy therefore will take even further to recover.
In Denmark and Sweden where there was never a complete lockdown too, the consumption has gone down by almost half as now in restaurants and shops people have to maintain a social distance and its even more difficult to have a normal restaurant or store visit. Governments have stepped in to try and keep the economy afloat, however as the lockdown ceases it will be clearer as to when and how to go about with the bankruptcies and have less than effective economy.
Even though banks are lending at an ever increasing rates we have to face it that an empty restaurant or an empty shop is not gonna be able to make rent and is eventually going to to closed down. The owner will first try to reduce his staff and then close down completely as it is extremely difficult to make those payments to banks and even low paid workers. This will increase unemployment levels leaps and bounds and consumption will go down as more and more people get unemployed.
In counties like India which are not consumption driven economies people tend to hold on to their liquidity even further, coupled with existing high taxes it will be extremely difficult for people to get their income levels high again. More over people will hoard the liquidity they already have due to economic uncertainty and the economy therefore will take even further to recover.
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