Pay Attention To These Predictions About the Economy

Even in a crisis, life must go on, and the current pandemic we are facing is no different than others from the past. 

It is important not to overlook the predictions that were made and what followed during the previous crises the world faced.

To be on the safe side, we should expect worse than those economists are predicting so we can be more prepared.

Stock Prices

This is a very serious problem that is currently occurring during the global pandemic. People are selling off their stock because of fear of a market meltdown, and that will force the prices down.

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As soon as the prices of shares go down because of the selloff, people will start to panic and also get rid of their shares. The problem now is that if the prices are down because of the selloff, should you buy the shares while it is low?

The real question is not if you should buy shares but altogether avoid buying those shares whose values are plummeting. And will the value of those shares ever increase again in the foreseeable future and become valuable again?

So, the thing is, to sell off your shares now may cause precisely what you do not want to happen. And that is forcing the value of the shares down to a point where it will not be able to recover from.

Job Loss

Because a lockdown is imminent, companies will have to close their doors for the duration of the lockdown. This is especially true for small businesses like restaurants and other public services that will cease to earn income.

And because the companies cannot afford to pay the salaries of their employees, they will have to lay off some, if not all, of their valued employees. And the worst-case scenario is that the company will completely shut down and close the doors permanently, leaving people without a job.

More people will apply for unemployment, and that will put a more substantial burden on the fund and, in the process, drain it. It will mean that the government will have to intervene, putting an even heavier burden on the economy of the country.

Economic Recession

Most industries will only feel the effect of the worldwide lockdown a few weeks after it started and quite heavily. There are certain public services, like buses, that will be suspended, putting an even greater strain on the economy and cause more frustration.

If people do not earn an income, they cannot pay their rent, and all the money they have will go towards food and commodities. Financial institutions are another industry that will start feeling the lockdown even heavier.

All these small factors will contribute to the countrywide economic slump causing people to spend less money on other things than food. These may look like insignificant things compared to the stock market fallout, but it is just a start.

We will have to take a look at all the layers of society to be able to estimate the impact of this current worldwide pandemic. And it may sound like a very negative picture, but we will have to prepare ourselves for more than we expect.

Interest Rates

This is going to be one of the main things we need to look at in the coming financial crisis the world is going to experience. Banks will have to lower interest rates for people to be able to recover from the global economic slowdown.

Because of the increase in unemployment, banks will have to extend repayment periods for a very long time.

Property Prices

This will also go down because of the global pandemic and will not be a good investment. If you want to invest in property, you will need to be patient for quite some time after this pandemic.

It will take quite some time for the property market to recover and build value after the economic recession.

Oil Price

Already the oil price war has started, and the price of crude oil will come down quite a bit not too far in the future. We will see very low oil prices while the competitors will fight for market share in that department.

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