MORGANTOWN, W.Va. – The coronavirus has brought West Virginia to a virtual standstill, economically speaking, and there will be a lot of negative ramifications if it is not handled soon.
This is according to John Deskins the director of the West Virginia University Bureau of Business and Economic Research. Deskins right now the state is doing “poorly”.
“I would say the number word is uncertainty because it all depends on how long this shutdown lasts,” Deskins said. “If this shutdown only lasts for another week or another two weeks then the ramifications might not be that severe. If this goes one month, two months, longer than two months then it could be absolutely devastating on the economy.”
Right now restaurants and bars are prohibited from having in-person customers, only carryout and delivery are available. Deskins said people are staying in their homes quarantining and not spending money at these bars, restaurants and other places forcing them to temporarily lay off many of their employees.
West Virginia can expect to see “big jumps” in unemployment as a result of this and a sharp drop in the gross domestic product Deskins said.
The underlying economy of West Virginia is fine, it’s only COVID-19 that’s causing the problems Deskins said. If the virus can be eradicated relatively quickly then the the state can recover and go back to normal. The problem, he said, is nobody knows if this shutdown will last for two months or longer.
“I’m still optimistic that if the virus is contained relatively quickly and if we can get back to work relatively quickly then I think the stock market could recover within six months or a year,” Deskins said. “But if this stretches out for years and it creates a lot more problem with financials across the board, then the stock market might take a lot longer to recover. I think that there’s still reason to believe that a year from now we could see a recovery in the market.”
The federal government is considering many policies regarding how to stimulate the economy since unemployment is up, spending is down and a recession seems more than likely if we continue at this rate for a few more months.
At the moment, Deskins said he cannot say which policies being weighed out are the best. However, he added that he does know one thing for certain.
“I will say that I think the federal government should pursue a pretty aggressive approach,” Deskins said. “Like I said this has the potential to be one of the deepest recessions that we had in decades and so I think this does really merit an aggressive stimulus package.”
Even though he is uncertain about what policy is best, he said he knows the aggressive stimulus will be much needed if the country is going to stay economically afloat during and after these weeks or possibly months of the shutdown.