The Coronavirus has turned the world on its head. There are few conversations to be had that don’t directly or indirectly make a mention of it today. One such conversation is the ongoing and future impact of the pandemic on the financial and economic stability of individuals and nations. While it is still nearly impossible to assess its long-term ramifications, there are a few consequences that are quite likely. So we thought we’d put down some pros and cons of the impact of Covid-19 on the economy of India, and the world at large.
- From the perspective of organizations, the pandemic has opened up a level playing field for consumer attention. Organizations across industries have been hit hard, some more than others, and the need to stay relevant has never been more important. This has driven organizations to develop more consumer-centric processes, products, and services. In the long-term, we might see organizations focussing more on creating value rather than just pursuing a quick buck – leading to a more innovative and healthy financial ecosystem.
- From the perspective of consumers, the situation gives individuals an opportunity to reassess their financial behaviours. With a lot of frequent activities such as dining out and non-essential shopping suspended, the average middle-class consumer has been spending less than before the lockdown. This is an excellent opportunity to fine-tune spending habits and build up savings. If anything, the situation has taught all of us the importance of having an emergency fund for unexpected events like the Coronavirus.
- The massive downside of this is quite obvious. Unemployment rates are expected to rise dramatically in the aftermath of the coronavirus. With most organizations adopting a cautious wait-and-watch approach, hiring is expected to be slow for the foreseeable future. This will particularly affect recent graduates and individuals that have been laid-off by their companies as a result of the pandemic. It would require a large economic overhaul, and good leadership by governments to recover from this situation
- On the other hand, organizations, particularly in industries like hospitality, sports & entertainment and others are facing the most difficult period of their existence. Some have had to suspend operations or shut down, and have a bleak future. Others that have managed to stay afloat are expecting a very slow recovery as consumption and non-essential activities are predicted to remain very slow for the foreseeable future.
While all of these outcomes affecting the livelihood of people are inevitable, we must continue to focus on what we need to do right now to stay safe. Because without a life, there is no livelihood.
Let us know your thoughts below in the comments!