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The Covid-19 pandemic has hit hard the world economy that caused an unprecedented crisis. Now analysts are comparing the pandemic with the 2008 economic crisis when the world saw a great recession. Both crises share uncertainty as a key factor in their emergence and spread. Though the 1930's crisis did provide essential lessons for 2008, but the economy of the 1930s was essentially distinct from the global economy of today.

The 2008 economic crisis was a slow hit, and events like macroeconomic developments, played out over months. But the crisis caused by Covid-19 has a sudden plunge in economic activity as major companies shut down their operations, as well as the closure of the supply chain globally. In India, this seems to have a more clear impact with a decline in electricity generation and passenger vehicle sales where the impact has been immediate.

The initial drops in the major countries' stock exchanges are similar until now between both crises. During both cases, markets were allegedly hyped. According to Robert J. Shiller, an American economist, the Price/Earnings ratio computed on the basis of the S&P was above thirty in 2020 and 2008, while its historical average has been around seventeen since 1881.

Certainly, there are no parallels to the Covid-19 pandemic in recent history but can be compared with the perspective of the global financial crisis. Considering data from Nomura Research shows Indian IT exports’ growth chop down from nearly 30 percent in the fiscal year 2008 to 16.8 percent in fiscal year 2009.

Conversely, growth rates have been considerably lower since fiscal year 2011 compared to pre-crisis levels. Besides, the Sensex faded around 38 percent from its January 2020 high due to the pandemic, and has recovered 20 percent from the March 23 with a slow start.

At present, the Covid-19 pandemic is already hurting global growth, since its impact is larger on global businesses. The global economy is now facing an uncertain situation mostly due to leaders are disrupted supply chain of services to enact measures to physically prevent industries from operating to contain the spread of the virus.

However, comprehending the world’s economies that were impacted hard during the 2008 financial crisis, policymakers took unprecedented steps. In October 2008, major central banks across the world cut interest rates at the same time.

In addition, with the threat of another great depression rising, the Group of 20 leading nations emerged as a powerful, action-oriented body, calling together heads of state and government for a global response to the crisis. These actions were key to ward off the worst and reposition the world economy toward growth.