Don't be pessimistic I live Canada I know what going on ground west can't shut down for ever things will eventually pick up not 100% but 90 % in a month Trump was forcing to reopen at Easter but increase it to May we don't have any lockdown here essential services are running yes private businesses are close but after Easter we will get calirity like Pak Govt is easing in steps same in west things will ease up after Easter schools given date May6 as things will heat up the spread will decrease its a flue and as summer comes flue goes away like any flue there is no cure except staying home and keep taking Advil or in Pak pannadol or Paracetamol things will back to normal but few precautionary steps will remain like Distance cleaning ur hands. Pak can pull out 8 billion package it can pull out some money for PAF too I assure U this time deal will happen little room to play politics since US needs business.Dear I don't want to act as pessimistic but I am not much hopeful if situation does not become stable in maximum one month then globally we are heading for a Recession, in simplest way I will try to explain the current situation as
- Currently demand specially in consumer segment is falling
- It is not just because of temporary layoff due to pandemic, but even after pandemic common pattern of demand will not remain same as it was earlier and general consumer, business and governments would increase their expenditure related to health as current pandemic has exposed heath sector of every country.
- Though all the business related to health would see growth but the issue is Health is a highly technical sector and it would not be able to accomodate general workers.
- Another sector which may see positive trend would be ICT again a very technical sector with comparatively limited job opportunities for small segment of job market, so in both cases unemployment rate would be high
- At Government level when expenses would increase with decrease income [both Tax and non-tax based] Governments all over the world will be forced to Reallocate the Resources by cutting expenses from other sectors.
- Due to the decrease in demand in many sectors confidence of investors in those sectors would be shaken, they too would face a situation where they might have to take the decision of extreme cost cutting or to disinvest in both cases it will affect job market and income of general consumer.
- Now here recall the Trade war which may increase after pandemic b/w the countries to safeguard their domestic economy and to create job opportunities in domestic market
- Decrease in Demand and Trade wars may force business to reduce prices to increase the demand which may trigger Deflation
- Low Oil prices is also another factor which this time if not handle properly would affect negatively as it will effect Renewable Energy and Shale Oil and Gas Industries, on the other hand it will decrease the revenue of oil producing countries specially in Middle East where foreign labour from many countries are employed.
- Decrease of income due to low oil price and increase of expenses due to multiple war in Middle East would negatively affect both eastern and western countries as Middle east is a big consumer market for the western goods and services and it is a valuable source of Foreign Remittance of many developing Asian countries.
So in short due to the factors stated below:
- Reallocation of Resources
- Decrease of Demand [due to many factors]
- High Unemployment Rate and
- Deflation
Global Recession will be Triggered If somehow we fail to control the unemployment or maintain [ideally increase] the demand Globally.
All these stories are assumptions based nothing more all these layoffs are temporary like Air Canada laid off 4500 of her staff now after Covid over they need this staff back to run the operation again till recall these staff will take EI employment insurance for month or two.
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