After the universal epidemic of the Coronavirus began in 2019, you will hear words like the media like economic crisis and recession.
In this video, these words are repeatedly adorning the news because the world is currently exposed to the economic crisis created by the Coronavirus, which the IMF has described as more dangerous for the global economy than the Great Depression. We will also explain about Great Depression.
According to an IMF report, economists worldwide agree that by the end of 2020, the Coronavirus epidemic has caused the global economy to lose nearly $4 trillion, causing 4.4 percent in global GDP. Has decreased
Due to lockdown, travel, and trade sanctions, inflation has reached the highest level in many countries due to the disruption of goods delivery. In contrast, most governments have to borrow new loans to run the empire and pay for already owed loans. He also had to postpone it again and again.
According to a World Bank report, the debt burden on low-income backward and poorer countries increased by 12% during 2020, and these countries became more owed to $860 billion. Another report states that global debt is likely to rise by 260% by the end of this year, while the Institute of International Finance says global debt volume will likely reach around $300 trillion this year.
It can be gauged from why the IMF has described the economic crisis created by the Corona epidemic as more harmful than Great Depression. But this is not the first time that the world has faced such a severe economic crisis, but it has come up with at least five economic crises that have caused the global economy to suffer the worst destruction.
Here we will shed brief light on these crises.
Credit of 1772
The crisis began in London, and soon it engulfed Europe. In the 1760s, the Empire of Britain collected immense wealth through the occupation and trade of its colonial resources worldwide. Because of the sense of optimism in British society, the reason for British society began to prevail. Seeing so much wealth, banks also increased their credit schemes. People deposited their money in banks.
But then came the day of June 8, 1972, when Alexander Fordis, a member of the British Banking House, founded in 1757, fled to France without paying the heavy debt. This news spread chaos in England. People worried about their money, and long rows of people were taken to take cash outside banks in England and Scotland. They were named Banking Panic.
The British Banking House started using consumer funds to address its losses. Within a few days, the bank closed, and three more banks were closed in London and Scotland. Within the next two weeks, banking crises in England, Scotland, and Nandlands intensified, and many small banks closed without looting public money.
The crisis also further weakened the East India Company in the financial difficulties, even as the company had to approve the T-Act from Parliament for tax exemption on tea imports in 1773, on which other business companies started protesting. Historians say the events caused by this banking crisis proved to be a precursor to the Boston Tea Party protests in the United States and the revolution in the United States.
It is considered the worst economic crisis of the twentieth century. Great Depression is said to be born in 1929 with the crash of Wall Street and later intensified due to wrong decisions by the US government.
The economic crisis lasted for almost ten years, resulting in the industrialized states of the United States and Europe being pushed into a swamp of inflation and unemployment.
At the height of the crisis in 1933, the unemployment rate in the United States increased to 25% and 33% in many countries. Global trade fell by 50 %, while commodity prices fell by 60 % in agriculture-dependent countries as people did not have money to buy sex.
1973 Oil Crisis
The economic crisis arose when the Arab states, which produced oil to provide war weapons to Israel during the fourth Arab -Israeli war, which began on October 6, 1973, stopped oil supply to the United States and its allies.
The closure of the oil supply caused severe fuel shortages in many other developed countries, including the United States, which gave rise to the economic crisis in the United States, increasing fuel prices and the prices of food items, which made the US economy stagnant.
The crisis continued for a few years, and economists call this period the name of Stagflation.
The Asian Crisis of 1997
Thus, most economic crises were born in the US or Europe and later continued to affect the whole world, so they say that the US economy is global. But in 1997, Thai’s economy was in crisis, and soon its trade partners and East Asian countries began to be affected.
Asian Tigers, such as Thailand, Indonesia, Malaysia, Singapore, Hong Kong, and South Korea, were burdened by the crisis. Foreign investors began to withdraw their capital, which resulted in the echoes of the bankruptcy of the East Asian economies.
The Thai government had to withdraw from the fixed exchange rate against the US dollar for the first time as dollars had become rare in the country, and foreign exchange reserves were taking their last breath.
When the effects of this economic crisis began to fall from East Asia to other countries, the IMF supported the most severely affected economies and announced a bailout package.
The Financial Crisis of 2007-08
It was considered the most dangerous financial crisis after the Great Depression, as it created the most significant recession and destroyed the financial markets worldwide.
Along with many other factors, the crisis was born as a result of the bankruptcy of Lehman Brothers, one of the world’s largest investment banks and the worst fall in the Housing Sector in the United States, and also to take many major financial institutions at the threshold of bankruptcy. As a result, a new wave of inflation and unemployment worldwide took ten years to overcome.
Global financial institutions had to announce loans and bailout packages for countries affected by the crisis.
Corona’s Economic Crisis
Now the world is facing the economic crisis created by the global epidemic of the Corona virus that has caused the most damage to the trade and supplies of goods to the chain, which has caused prices to touch the sky, and nothing can be said about how long will this crisis continue?