COVID-19. A disease infamous for its high infection rate, has rapidly spread from its initial spread in Wuhan, China, to 153 countries and territories around the world in the span of four months. With the declaration of COVID-19 as a pandemic by the WHO on the 11th of March, 2020, a multitude of countries globally have become taking precautions to limit the spread of the disease. With more than 157 000 cases globally, some countries have taken an aggressive step to combating the spread of COVID-19 further. From the complete shut down of cities in China and Italy, the closing of borders to tourists in 24 European Countries and the banning of public events that number over 500 in Australia, all these decisions have an impact on the economy, both domestic and international.
Domestic Economy – The economy of one’s own or particular country. Relating to one’s home.
International Economics – The effect upon economic activity from a global standpoint. Involving two or more nations.
What is the impact on the Domestic Economy?
With the panic of coronavirus ensuing, many sectors of our domestic economy have taken a blow, with many suspecting that the eve of a recession is near. The domestic and international economy are symbiotic almost, with changes in the domestic economy having an effect on the international economy. One such example is international trade. Australia as an economy are more reliant on imports now, more than ever. With the termination of shipping containers from overseas, particularly China, many local businesses that are reliant on supplies from overseas, cannot cope with the lack of supply. An example being the housing industry, the supply of windows in our market is predominantly from China, so with the termination of trade of resources, then houses are unable to be outfitted with windows. With a drop in revenue, businesses are forced to lay off a percentage of their workforce to cope, leading to a rise in unemployment. Additionally, with the rise of infections, panic ensues, leading to the making of irrational decisions by consumers. An example being the avoidance of many restaurants that normally feature Asian cuisine.
Recession- A general decline in economic activity. Normally occurs when there is a widespread drop in spending.
International Trade- Trade between two or more countries
What is the impact on the International Economy?
The impact of the international economy is linked to the impact on the domestic economy. The purpose of international trading is to open the market for businesses to both increase revenue and reduce costs. So by bringing international trade to a standstill, these companies will experience a substantial decrease in revenue, administration becoming a common course of option. With a decrease in amount of profitable businesses, the amount of workers decrease, leading to a decrease in overall tax. With the limited budget, the development of countries stagnates, as there isn’t enough money to develop facilities further. This has led to an overall global economic growth slowdown, with the GDP growth overall estimated to drop by around 1-2%.
GDP- Gross Domestic Product. Total value of goods and services
Personal Opinion
I think that the way that the government is combating the virus is correct, however, they should be offering more to the local businesses as well. Although they have made a $17 billion Corona virus stimulus package to stop the effects of Corona virus from being to detrimental to our economy, there are still many businesses that are have to go into administration due to a lack of customers but steady fixed costs. In the long term, I believe that we will go deeper into recession if we do not receive more aid from the government.
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Year 11 MHS Economics 2020 
Very thorough analysis on the matter. I wonder how much longer this plague will affect our nation for.
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Relevant topic. It’s interesting how the government will stimulate the economy during this crisis considering the Liberals and Scomo spent years bashing Rudd’s economic stimulus during the GFC. Now their hand might be forced into doing similar.
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Interesting approach on the topic! Hopefully they find a cure soon.
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