12:58 am
Sunday 29 March 2020
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Books – Mohamed Safwat
The repercussions of the new Corona epidemic (Covid-19) continue to hit the global economy strongly, after several countries were forced to announce the complete closure, to face the epidemic that claimed the lives of nearly 25 thousand people around the world.
On Friday, the International Monetary Fund announced that the world economy was entering a recession, following the outbreak of the Coruna epidemic, stressing that the measures taken to support the economy may not be sufficient before the epidemic receded.
Kristalina Georgieva, director of the International Monetary Fund, confirmed that the Corona pandemic has pushed the global economy into a downturn that will require massive financing to help developing countries.
“It is clear that we entered into a downturn,” she said in an online news conference. “It will be worse than it was in 2009 after the global financial crisis.” With the “sudden stoppage” of the global economy, the fund estimates “the overall financial needs of the markets.” The emerging, $ 2.5 trillion, “warning that” we think this is the minimum “, as more than 80 countries have already requested emergency assistance from the International Monetary Fund … but is this the biggest crisis that has hit the global economy?
The Great Depression
In 1929, a major economic crisis hit the global economy in what is known as the Great Depression, which is the largest and most famous economic decline in the modern era, and became an indicator for measuring the depth to which the global economy can fall.
The grinding crisis began in the American stock market on October 29, which was known as the Black Tuesday. The crisis affected almost all the rich and poor countries, and global trade decreased by half to two thirds.
The New York Stock Exchange offered 13 million shares for sale, and did not find buyers to lose the shares quickly, which spread terror among investors at the time, and brokers began to sell heavily, bankruptcy of thousands of shareholders, and dozens of financial institutions soon declared bankruptcy and closed factories, before the crisis eroded global markets Like wildfire, crop prices fell 40% to 60%, and caused a feeding crisis for one-fifth of the children in the United States at the time.
The Rapid Fall 1962
In December 1961, the world was with a new date with a severe economic crisis, beginning in the era of US President John F. Kennedy, known at the time as the rapid collapse of American financial markets, and that extended until June 1962.
Markets began to grow after the Great Depression in 1929, to come the stage of correcting the conditions, or what is known to traders in the exchanges, for a period after the stock indexes reached very high levels, followed by a wide sale phase to profit from high prices, but the S&P lost 22.5% of its value. , And the Dow Jones fell 5.7%, the second largest drop in the second in its history.
The collapse of 1973
In the Great October War, the Arabs used oil as a weapon against Israel, and declared a ban on exports to countries that support the occupying power, which caused the price of oil to rise globally, and lasted only for five months, but it caused one of the worst recessions in the stock market in the modern history.
Black Monday 1987
On October 19, 1987, global financial markets suffered huge losses, affected by the severe downturn that affected Asian markets and moved to Europe and then the United States, and its time was known as the Black Monday.
The US Dow Jones Index lost 508 points and lost more than 22% of its value, while the British losses were greater, valued at 60%, the Hong Kong economy lost 45.8% of its value, while the Australian economy lost 41.8% of its value.
1997 crisis
The global economy recovered after ten years of the Black Monday crisis, but it soon started to fall apart again, and the global stock markets witnessed a huge downturn, following an economic crisis in Asia, and the Dow Jones index recorded the eighth largest daily loss since the American Stock Exchange was established in 1896, and reached The index decline rate is 7.18%, and the Nasdaq index has decreased by 7% and the S&P is 6.68%.
The collapse of 2008
On the sixth of October 2008, the global markets were in a date with a new collapse, after the Dow Jones index fell for five consecutive sessions to lose 18% of its value, followed by the Ando Poor’s index more than 20% and after a few days the global indicators recorded a decline of 10% Of its value
The crisis started from the United States, and spread to the rest of the world, and European countries, Asian countries, Gulf countries, and developing countries whose economies are directly related to the American economy.
Central banks and governments were forced to intervene to buy banks and other lending institutions that were close to bankruptcy in an attempt to prevent the collapse of the financial system, and the number of banks that collapsed in America reached 19 banks, causing the credit crisis and the collapse of financial markets.
According to economists’ estimates, the world economy lost 45% of its value due to this crisis.
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