Since emerging in the Chinese city of Wuhan lately last year, the COVID-19 pandemic has spread to 213 countries, infecting more than 4.9 million people around the world and killing over 3,25000 globally. To prevent further spread of the disease, several countries across the world implemented lockdowns to varying degrees to“flatten the curve” of the infection. This lockdown led to millions of citizens stay in their homes, shutting down businesses and halt almost all economic activity.
The great lockdown had a major impact on the global economy affecting businesses and causing people to lose their jobs.
How hard was the economy hit?
The IMF’s chief economist Gita Gopinath wrote in her recent blog post that COVID-19 is truly a global crisis that has not spared any country. The IMF recently announced in a press interview that the COVID-19 lockdown is expected to shrink the global GDP by 3% in 2020 and 170 countries will be stranded with lower GDP per capita by the end of the year. The managing director of the IMF also added that if there is a comeback of COVID-19 in 2021 the global economy will be struggling for years to come.
Rise in unemployment
In the United States, a lot of people have already lost their job and the number of people filing for unemployment benefits hit a record high, which has terminated the expansion of one of the world’s best economies.
Crash in oil prices
As the global lockdown has kept people inside their houses, the demand for oil has reduced significantly. This has led to a major drop in oil prices. The crude oil price hit the lowest in the last 18 years and in the U.S the price of a barrel of West Texas Intermediate (WTI), which serves as one of the major global oil benchmarks, turned negative for the first time in history.
Risk of recession
As already stated, the IMF says that the global GDP is expected to shrink by 3%, which is the worst after the great depression of the 1930s. However, if the pandemic fades in the second half of 2020, there is an increasing chance for the global economy to rise to 5.8% in 2021.
Services industry hit hard
The services industry plays a major role in the growth and employment of many developing and developed countries. Transportation, travel, real estate, hotels, and tourism has been badly damaged, experiencing some of the largest declines in their activities so far.
Slump in production
Due to strict lockdown and various restrictions, the manufacturing activity of even the most reputed companies in the world has come to a halt. A lot of small to medium manufacturing companies have temporarily shut down their factories, whereas those that remain open run out of their supply of intermediate goods and materials.
Rise in technology
Governments around the world have urged employers to offer work from home for their employees where possible. This has led to the increasing use of online apps like Zoom, Skype, and so on. The demand for online shopping has also seen tremendous growth when compared to last year. With that said, how do you go about setting up a video call or getting updates on your ordered product? Probably through text messages.
What makes texting so useful during this crisis?
More than any other form of communication, texting is considered the best way to communicate with people due to its various benefits. 96% of the people own a mobile phone and text message has a higher open rate of 98%. A person doesn’t require a smartphone to receive text messages so even people with below-average income levels can receive important notifications sent by the government. For example, the U.S government enrolled telecoms to send emergency messages related to Coronavirus preventive measures, safety precautions to follow, helpline numbers, and more.
Role of messaging in the global economy
Various forces drive the economy and one among those is messaging. Especially, during uncertain times like these, the right messages need to be delivered to the people in real-time. Messages help in managing micro as well as macroeconomic activities.
Transactions are the foundation of any economic activity and messages help in allowing transactions to take place smoothly and continuously. Similarly, messaging help in banking transactions and brings manufacturers, distributor, consumers, and lenders together, acting as an energizer for economic activities and thereby contributing to GDP.
There is increasing adoption of text marketing by various industries like retail, travel, hospitals, BFSI, and more. For example, retail stores use SMS marketing to send details on the products they offer, their timings, deals, and more. Restaurants use online text messages to send messages about the safety precautions followed at their restaurant, food items available, and more.
Due to this reason, the U.S government is improvising the rules and regulations for sending a bulk online text message to protect the privacy of the people. This improved regulation for using SMS messaging in the U.S has boosted the demand for bulk text marketing. Thus, the bulk SMS marketing market is expected to witness rapid growth during and after this pandemic.
Therefore, along with effective communication, broad monetary and fiscal policies will be required to boost the global economy.
I am Susan Raj, Marketing Head of TXTImpact provides Business Text Messaging products for marketing and support customers to increase your client base. Our Enterprise Text Message Marketing Platform designed for your business, allows marketers to communicate and engage customers on the go instantly.