A briefing issued by the United Nations Department of Economic and Social Affairs (DESA) revealed that the global economy could shrink by 1% in 2020 on the contrary to the 2.5% forecast due to the COVID-19 pandemic.
The global quarantine and restrictions are already having an impact on the service sector, mostly on industries that involve physical interactions such as retail trade, leisure and hospitality, recreation and transportation services. Collectively, they account for more than a quarter of all jobs in these economies. As businesses lose revenue, unemployment is likely to increase sharply, transforming a supply-side shock to a wider demand-side shock for the economy.
The impact is also visible in the shipping industry, as the EU shipbuilding sector has already called for urgent, tailor-made sectoral support to safeguard the survival of Europe’s strategic maritime technology industry.
It is added that the negative effect of restrictions on economic activity which is taking place mostly in developed countries, will soon affect developing countries as well. A sharp decline in consumer spending in the E.U. and the U.S. will reduce imports of consumer goods from developing countries. In addition, global manufacturing production could contract significantly, amid the possibility of extended disruptions to global supply chains.
The developing countries dependent on tourism and commodity exports may have to deal with severe economic risks.
Moreover, Mr. Alexandros Danousis DPA / HSEQ Manager at Eurobulk Ltd. Eurobulk Ltd stated that the shipping industry has been hit severely by the restrictions enforced for the control of the pandemic. From the ship manager’s perspective, those can be separated in two major categories: Ships operation and Office operation.
In hard-hit Italy and Spain, for instance, an estimated 27% and 40% of the population, respectively, do not have enough savings to allow themselves not to work for more than three months.
