Question

From the article “The worst of the storm looks to be behind us” of BDC June 2020 newsletter:

1. Why was low economic recovery and what happened to consumer spending explain?

2. Analyze the 20 industrial sectors and why 19 of them declined? What does it mean for entrepreneurs?

3. What was the industrials sector that did not decline during the period? Why?

Answer 1

COVID-19 pandemic and measures taken to contain the spread of the Corona virus has plunged the global economy into recession. Most of the market places, factories, industies and businesses were shut down to ensure social distancing norms. Millions of people lost their jobs. All these measures led to almost non-existent economic activity in the two months ( April and May ) following the arrival of Corona virus. This led to sudden fall in aggregate supply as well as demand in the economy. This is why economic recovery and consumer spending reduced drastically.

This pandemic has brought an unprecedented economic sufferings to the citizens as well as to the enterpreneurs. Government must ensure relief package for businesses, enterpreneurs as well as citizens.

Pharma or medical sector is the only sector that did not decline during the period as demand for medicines, and other goods of this sector increased with millions of people being infected with virus led to an increase in demand for such goods.