The world commodity and stock exchanges as well as Belarusian exchange offices are in turmoil. How will coronavirus affect the international economy and specifically Belarus?
According to the economist Siarhey Chaly, when it became clear that the coronavirus covered the whole world, and there is an impact on the world economy, the issue was not even the onset of the global recession but its length in the financial markets.
The conditions for crisis in the financial markets developed already a few months ago, and the only thing they needed was a trigger.
“This trigger could have been anything, but there was coronavirus,” believes Mr Chaly.
There was a blow not only to the supply but also to the demand. If the employer is forced to send employees on leave, drop in income leads to people buying less. Accumulation through panic means that demand will decrease even more in the future. In addition, investments are falling due to the uncertainty of future demand.
“The demand – is both supply and production, services, plus at the same time more and private investments,” says economist. “The fall in demand for goods and services, reducing their profits, also leads to a blow to the financial markets, which means a drop in prices. This is the case when there is so much snow that there exist a danger of something falling”.
