The world is in the midst of a major recession. Massive financial institutions are on the verge of collapse. Unemployment is skyrocketing and you have stopped shopping for some time already because of recession. But no one knows about the real impacts of recession on technology world. The global economic situation is causing wide range of problems to millions of people. Few consequences mentioned below can be directly observed by average internet users; rest are indirectly observed. I am sure that almost none may actually know all these impacts caused by the current financial meltdown…
More job cuts. Lowering the wages. Decreasing the purchasing power.
The current economic downturn has created some negative consequences for the world’s economies and technology. The following are some of the most significant ones.
Job cuts. Not many people like to say it, but job losses are inevitable if companies don’t feel like hiring more people. To avoid layoffs, companies like to reduce head count in areas that aren’t as critical to their survival — things like IT, marketing and finance departments. Even so, the recession has led to a number of companies laying off workers by the hundreds annually.
Lower wages. Like job cuts, wages offer companies a way to save money on salaries when times are tight. Wages are usually slashed because higher-level workers can be replaced by lower-paid workers, who may not require health insurance and other benefits that would cut into profits. In some cases, workers are laid off while others are kept on the payroll but offered unpaid leave or reduced hours until they’re let go later on.
Decreasing purchasing power. One of the worst parts of recession is that it can cause consumers to tighten their belts. Many people have gone back to school or taken lower-paying jobs, opting for cash instead of spending money on things like new cars or vacations in order to save up for a rainy day.
The devaluation of the dollar. Transferring the burden to citizens via increasing prices and taxes.
The global economy is going through a stage of deep crisis. The main reason for this is the coronavirus, which has already claimed more than 200 thousand lives. The pandemic is accompanied by an economic crisis, which has already affected many countries and world markets.
The consequences that the world economy may face:
- The devaluation of currencies, including the dollar, amid a decline in oil prices to levels that are not profitable for its production.
- Recalling loans by banks as part of tightening credit policies to reduce losses from non-returnable funds during quarantine and business decline (crisis).
- Increase in insurance payments due to an increase in the number of accidents and loss of work due to quarantine.
- An increase in unemployment due to a decrease in demand for goods and services (quarantine).
- Rise in prices for food, medicines and fuel due to an increase in demand for goods with dwindling supply chains (quarantine).
- Rise in prices for gold (historically, it is one of the most reliable means of securing capital).
- Increase in prices for cryptocurrencies against the background of the devaluation
US market’s recession will affect other global markets, including European markets and Asian markets.
The economic situation that the world is currently facing has had a significant impact on the global economy. The consequences on the U.S. economy, as well as the European and Asian markets, have been very severe.
Europe is slowly recovering from this period of recession, and it is expected that other developed countries will also experience a recovery in the coming years. Financial markets are now working together to solve this problem, but there are many challenges ahead.
Inflation is a major issue for the world economy today. Inflation can be defined as a situation where prices of goods increase more than their production value. This is because of an imbalance between demand and supply of goods.
As a result, people tend to buy less goods and services because they cannot afford them anymore. Due to this, there is a shortage of goods in the market and prices increase dramatically to meet demand.
Inflation causes several problems for businesses because it reduces their profit margins significantly. When companies produce less goods, they also make less money per unit sold and have to increase prices in order to stay competitive in the market.
If there is an increase in inflation rate in an economy, consumers are forced to spend more money for products and services than before due to rising prices of goods and services which
There will be a drop in living standards in the US, which will have direct consequences on the global economy, as the US is one of the most famous importers across continents.
Financial turmoil will cause slowing of the growth process and an increase in inflation rates in many countries.
Emigration of scientists and great minds from Europe to America; these will be a great loss to Europe, which may lead to an economic downturn that lasts for several years.
This may also cause European countries to lose international competitiveness due to lack of investment in higher education and research.
The spread of poverty, disease, and hunger among poor countries because of decreased aid from developed countries (specifically from USA).
The World Bank predicts that the global economy will shrink by more than 1.7% in 2020, due to the COVID-19 pandemic. In comparison, the global economy grew by 2.9% in 2019. The severe impact of COVID-19 on economic growth is also reflected in the fact that the global economy shrank by 3% during the financial crisis in 2009
The global economy is crashing fast. You’ve got to take your cash and run. If you want to know where to put your hard earned green, check out my top picks below. Check back here often and bookmark this page because it’s updated frequently.
