Question

Discuss the impact of Covid-19 on the world economy and its consequences on the market of oil in Morocco.

Answer 1

Answer :-

Today, the whole world is affected by corona virus, not only millions of people have lost their lives due to this virus, but also the economy of the countries are going through their most difficult phase. The lockdown is causing a recession in the global economy. Corona virus has affected the following areas of Economy : -

Effect on Consumers or Investors Decision :-
There has been a huge reduction in economic activities due to the lockdown, crores of people have lost their jobs, companie's income goes down . Due to all these reasons, there has been a change in the behavior of consumers behavior due to less money. In times of such crises, people want to spend only on essential items and to save money for future needs.
On the other hand, the continuously falling stock market is also showing lack of enthusiasm in the investors. Investors are also reluctant to invest in the market during this crisis. Due to this slowdown there are also fears that new investors may turn away from equity forever. Today, investment in mutual funds is also decreasing , Bechmarks are also at all time low. all investors are putting in their capital either in liquid or in short-term investment.

GDP: - Due to Corona virus, the whole world is in Lokdown today, due to which economic activities are stopped there, which is affecting country's gdp. If we talk about the month of April, then all the major economies have suffered a slowdown, in April the GDP growth of America is -5.90%, in the UK -6.50%, in Japan -7.00% and countries like India and China Is below 2%.

Energy: - Due to corona virus, not only people but also their trains and public transport including trains and planes are also in lockdown . Due to this demand of crude oil is in historical low , due to which the price of crude oil has come down.

Agriculture: - Due to so many days of lockdown, the agriculture sector has also suffered immense losses. The farmers are not getting customers for their crops, vegetables, fruits and other products, the markets are also closed. It is also expected to have an impact on the coming season.

Manufacturing: - Major companies such as Larsen & turbo, Unilever etc have had to stop their manufacturing, all two wheeler and four wheeler companies have also had to stop production. Various mobile companies such as apple, samsung have also had to stop production. E Commerce services are also closed. Thus manufacturing industries are in crisis due to corona all over the world.

Stock market: - For all the above reasons, stock markets of all countries are running at a historical low. From the wallstreet to the sensex of India, all the share markets are in decline.

Tourism: - If corona has had the greatest impact on anyone, it is tourism. Today all are locked in homes in their own countries, due to which tourism and people dependent on it are facing extreme problems.

Impact on Morocco Oil market :-

In the latest oil market forecast of the international energy agency, it has been claimed that due to corona virus and its consequent lockdown, the demand for oil will decrease in the year 2020 for the first time since 2009. IEA estimates that the oil demand will decrease by 90,000 barrels per day in 2020 as compared to 2019, which will severely affect the oil market. The oil market of morocco also cannot remain untouched by this, morocco used to export its oil mainly to Europe, America and Asia, but today the countries here remain hotspots of covid 19, movement is closed due to lockdown, people is going out only from homes for necessary works , due to which the demand for petroleum oil products is decreasing. The price of cruide oil is also falling due to the decrease in demand, due to which all the oil markets of the world including morocco are suffering losses.