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The world had faced a wide range of pandemic in a different era. Medical researchers and scientists have provided different meanings to the pandemic; however, instead of different definitions of the word “pandemic” everyone agrees on, it is the outspread situation of a disease that suddenly and engulfs a geographical region such as a country or whole world. Some of the diseases like cholera, bubonic plague, smallpox, and influenza are declared pandemic and are the major killers in history. The smallpox disease has killed over 300-500 million people worldwide in its 12,000-year existence. The unending COVID‐19 pandemic is one of the major crises of modern times. It was 11 March 2020, when the World Health Organization (WHO) declared that there is one more pandemic threat to humanity called Covid-19. With the appearance of Covid-19, all the countries are found in a “coma” like situation. Covid-19 has its roots in Wuhan city of China. On 31 December 2019, WHO received inputs of pneumonia cases in Wuhan city of China, but the cause of infection could not be known initially. However, after some time, the medical researchers of China disclosed a novel coronavirus as the cause on 7 January 2020, and were named “2019-nCoV”. The coronavirus (CoV) belongs to Severe Acute Respiratory Syndrome (SARS) species that lead to infection, causing illness, starting from common cold to some serious sickness. The novel coronavirus is a new strain that has not been found in humans. The new disease was named COVID-19. As time passed, the number of cases for Covid-19 infection was increasing outside China and the condition seemed to be out of control irrespective of taking the precautions given by the World Health Organization. Finally, on 11 March 2020, the WHO Director-General Dr. Tedros Adhanom Ghebreyesus announced the outbreak as a pandemic (WHO, 2020). As the fear and ambiguity rose among companies and firms, the profit rate seemed to be lower due to the impact of Covid-19. The stock market has been wiped out nearly US$6 trillion in wealth from 24th to 28 February. There was a great decrease in value over the S&P index, which abolished over $5 trillion in the same week; however, the largest 10 companies of S&P faced a loss of $1.4 trillion (Jagannathan et al., 2013). The investors make an analytical prediction that firms' profits may drop in response to the impact of coronavirus.
The financial outlook of the International Air Transport Association (IATA) in 2020, showing the global air transport industry with a net profit margin of -20.1 percent, lose $84.3 billion. Revenue will drastically fall in 2019 from 50% to $419 billion from $838 billion. In 2021, as revenue rises to $598 billion, losses are expected to be cut to $15.8 billion (Jagannathan et al., 2013). The flight and hotel bookings were canceled on a large scale, the cancellation of local and international events worth $200 billion. The flow of goods across the countries cut down extensively. The Chinese government declared the shutdown of main factories in the country, as China is one of the worlds' largest producer and a broker. The government of many countries like Iran, Italy, France, and India framed 'stay-at-home' and 'social distancing' policies to manage the spread of coronavirus as it had taken millions of lives. The implementation of 'stay-at-home' like policies sow the seeds to decrease business activities in most developed countries. The economists agreed that this deadly virus pandemic would push the world into a global recession.
The literature over the grounds of recession is vast (Stiglitz, 2010; Gaiotti, 2013; Bezemer, 2011; Mian and Sufi, 2010; Bentolila et al., 2018; Bagliano and Morana, 2012; Radelet et al., 1998_. However, the collapse in business activities for the year 2020 was novel in history. The recession due to coronavirus is different from the past. For example, in 1997, the fall down of the Thai currency in July 1997 generated fear that leads to region-wide monetary calamity and economic recession in Asia (Allen and Carletti, 2010). In 2008, a recession in terms of financial crisis occurred due to monetary policy followed by mortgages and their strong influence in the banking sector (Lu, 2020). In Nigeria, the drop in the price of crude oil, an increase in the pump price of petrol in 2016 took the shape of the recession.