Question

Question: Which sectors of the economy are the worst hit by Corona Pandemic and which sectors may have benefited from the Corona Pandemic? Take one or more countries as examples for your answer. Support your findings with data and analysis as much as possible. Clearly mention the country name(s).

Direction: Please answer the question in detail. Support your answer with data and references as much as possible. Do not copy and paste. Write in your own words and provide references wherever applicable. Use economic terminologies as much as possible. Write legibly in complete sentences using the correct English language. There is no page limit

Answer 1

2 sectors of the economy which I think have taken the maximum hit from the Corona Virus Pandemic are Travel and Hospitality.

With the entire world virtually in a lockdown, and no commercial travel other than frieght, there is extremely low usage of airspace. Flights have been cancelled and millions of travellers who had booked advance tickets had to be refunded. Also, there is no clarity as to when the services might start operating again. So there is a huge uncertainity.

Coming to freight carrier, people have switched to necessities from luxuries. So even freight requirement is quite low as there is no movement of spare parts for automobiles, or cheap goods from one country to another. So there is a huge loss here as well. One more reason why this will continue in the future is that people will be still wary of travelling. With the shift to digital meetings, even businesses will cut down on travel to reduce costs. This will affect the sector in a long time.

Coming to hospitality which is again an extension of Travel, since people are not travelling, hotels are going empty. There is no place where people will be travelling for leisure or business currently. Like the travel industry, there will be issues in recovery. Leisure will not pick up immediately as many people have lost jobs or got salary cuts. This has resulted in dipping into savings. Unless those are built up, there will be no recovery of these sectors in leisure. As for business, if people do not travel for business, there will be less requirement of hotels and corporate tie-ups. This will lead to problems for the sector as a whole for a long time.

Online Service providers have captured the Market. Video conferencing services like Skype, Google Hangouts or Zoom, is on everybodyé radar now. In India zoom has grown to become the most downloaded app on Google Playstore. This leads to high dependency on these platforms. Now after the pandemic has been taken care of, people will still reply on this for business meetings and conferences.

Another sector having gained massively is Pharma. With the companies developing vaccines, medicines, etc, they have gained traction though this is short term. These will not continue for long and once the pandemic is over, they will fall back into their usual cycle.