The impact of the coronavirus on the global economy continues to be felt. Indeed, after the asset outflow of the German insurer Allianz, it is around the British economy to pay the costs. Its gross domestic product (GDP) fell by 5.8% in March. What is the real cause ? What to expect in the next semaines ?
Despite being one of the world's leading economic powers, the UK economy has been very vulnerable since Brexit.
Between fearful investors and pessimistic local entrepreneurs, the English government was trying to do everything possible to avoid sinking. In this dynamic, it was far from suspecting that an economic avalanche was brewing behind its back.
Indeed, this month's official reports on the economic situation in this country point to a staggering drop in its GDP. The 5.8% in March represents the largest decline in its gross domestic product since 1997. A figure which, according to the National Statistics Office, is 2% higher than in previous quarters. This is enough to make all the players in the various sectors of activity perplexed, as this crisis has spared no area of life.
However, according to the specialists, this reduction in the English GDP was nevertheless foreseeable. According to the latter, the various fluctuations in its currency and the considerable drop in economic transactions with other European states are necessarily partly to blame.
Moreover, they also point to the consequences of this health crisis (Covid-19). On the other hand, as far as they are concerned, the latter were far from imagining that this percentage would be so high.
In addition to plunging the country into a state of crisis, this fall in GDP will have a major impact on the lives of many English people. According to experts, since all sectors of activity are bearing the brunt of this contraction, basic necessities are likely to be scarce.
This will lead to a price hike on the market. Thus, while traders will certainly make very good sales (speculation obliges), the population will suffer. Moreover, this situation hardly encourages local investors to inject money from their various activities. An operation that will inevitably lead to the slowing down of the economy of this great world power.
If this situation remains unchanged, the Bank of England forecasts an even greater contraction of the British economy in the coming months. Indeed, based on these analyses, the Bank of England believes that the fall could well exceed 5.8% and reach 25% between April and June. This would then be very catastrophic for this country, because such a crisis would risk bringing its economy to its knees.
On the other hand, it should also be said that such a situation can obviously push investors to move to other markets. A phenomenon that must be absolutely avoided if we are to hope that this economic machine will one day start working properly again.
In the light of all the foregoing, it is essential that the English government adopt effective measures to curb this phenomenon. This will enable it to boost its economy once again and to respond favourably to the grievances of its population, especially in this period of health crisis.