Pandemics that occur in the world have indeed influenced the global economic system and suppressed the economies of all countries. This is because the pandemic forces humans to limit their interactions with others in order to suppress the spread of the virus.
Long before the current COVID-19 pandemic, the world economy had also been battered by the Spanish Flu pandemic around 1918. Citing a report compiled by Ally Mintzer on econreview.berkeley.edu, the result of the Spanish Flu at that time also forced world countries to impose restrictions that influencing the consumption pattern of society and the business world so that the wheels of the economy move slowly or even temporarily stop.
The incident in 1918 was the worst in the history of the United States (US) because it claimed hundreds of thousands of lives or the equivalent of 0.8% of the population in the US. In addition, this flu also coincided with World War I.
This virus has a high mortality rate for all people aged 18-40 years, especially those of the male sex. The study from University of Florida biologists said there was a strong link between disease transmission and current unemployment.
This happens because many entertainment or service industries have suffered losses, but there are also businesses such as health that have experienced an increase. According to the Federal Reserve St. Louis mentioned that the economic impact of the pandemic 1918 was short-term, the payment of people’s salaries was normal and many businesses began to recover and operate more quickly.
It was also stated that the increase in wages during the pandemic was more difficult to occur because of the constrained conditions of inflation and political pressure in the country.
Currently, when the world is hit by the COVID-19 pandemic, the global economy is under pressure due to lockdowns by many countries, limited factory production, abnormal transportation and declining demand.
Citing un.org research, global trade in goods shrank 3% in the first quarter of this year. Then in the second quarter of 2020, it is also predicted to be weak.
Exports and imports of developing countries also recorded a decline in the second quarter, namely 7%.
Then international tourist visits in various countries recorded the worst conditions in history since 1950. Tourists fell by 60% in the first five months of 2020.
Currencies in a number of countries such as Venezuela and Zimbabwe have depreciated more than 70% due to the pandemic. Other currencies affected were Brazil, Seychelles and Zambia which depreciated 20% against the US dollar.
Even the International Monetary Fund (IMF) projects that there will be an increase in gross debt from developing countries by 4.5 points or 47.4% of gross domestic product (GDP). This figure is the highest since 2015.
In July 2020, the IMF projected world economic growth. this year minus 4.9%. This figure is lower than the projection released in April of 1.9%.
The IMF said economic growth in developed countries would be minus 8% and developing countries minus 3% in 2020.
In the IMF report, the growth of developed countries such as the United States (US) is minus 8.0%, Germany is minus 10.2%, France is minus 7.8%, Italy is minus 12.5%, Spain is minus 12.8%. Meanwhile, Japan’s economic growth was minus 12.8 percent, Britain’s minus 5.8 percent, Canada was minus 10.2 percent, and other developed countries were minus 4.8 percent.
Meanwhile for developing countries globally it is projected to be minus 3.0%. But, developing countries in Asia the growth was minus 8.0%. From this figure, the IMF projects that China’s economy will still grow positively by 1%, while India is minus 4.5%, and ASEAN-5 as a whole is minus 2.0%.
The Fives ASEAN consists of Indonesia, Malaysia, the Philippines, Thailand and Vietnam. If broken down one by one, the IMF projects Indonesia’s economy to be minus 0.3%, while Malaysia is minus 3.8%, the Philippines is minus 3.6%, Thailand is minus 7.7%.