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Impact of the coronavirus pandemic on the global economy - Statistics & Facts

While there is no way to tell exactly what the economic damage from the global COVID-19 coronavirus pandemic will be, there is widespread agreement among economists that it will have severe negative impacts on the global economy. Early estimates predicated that, should the virus become a global pandemic, most major economies will lose at least 2.9 percent of their gross domestic product (GDP) over 2020. This forecast was already restated to a GDP loss of 3.4 percent. To put this number in perspective, global GDP was estimated at around 84.54 trillion U.S. dollars in 2020 – meaning that a 4.5 percent drop in economic growth results in almost 2.96 trillion U.S. dollars of lost economic output.

Impact on global stock markets

Global stock markets have also suffered dramatic falls due to the coronavirus outbreak, although they were able to recover from the losses quite quickly. The Dow Jones reported its largest-ever single day loss of almost 3,000 points on March 16, 2020 – beating its previous record of 2,300 points that was set only four days earlier.

Affected industries

The economic damage caused by the COVID-19 pandemic is largely driven by a fall in demand, meaning that there are less consumers willing to purchase the goods and services available in the global economy. This dynamic could be clearly seen in heavily affected industries such as travel and tourism. To slow the spread of the virus, countries have placed restrictions on travel and many people could not purchase flights for holidays or business trips. This reduction in consumer demand was the reason why airlines lost planned revenue and as a result they had to cut their expenses by reducing the number of flights they operated.

Government support

Despite the clear danger that the global economy is in, there are also reasons to be hopeful that this worst-case scenario can be avoided. Governments have learned from previous crises that the effects of a demand-driven recession can be countered with government spending. Consequently, many governments are increasing their provision of monetary welfare to citizens, and ensuring businesses have access to the funds needed to keep their staff employed throughout the pandemic. In addition, the specific nature of this crisis means that some sectors may benefit from it. E-commerce, food retail, IT, and the healthcare industries provide at least some economic growth to offset the damage.

Going back to normal..

A mitigation of restrictions placed on global citizens after the third coronavirus wave had been tamed brought a relief to economies worldwide. Many companies could increase their employment figures and work on plans to make up for lost revenue. Higher prices of products and services are reflected in rising inflation rates.
Even though the majority of the global population is vaccinated against COVID-19, the fourth wave of the coronavirus pandemic is already taking its toll in many countries all over the world. Global governments are once again pressured to come up with new solutions to bring it under control, while not putting people, jobs, and businesses at enormous risk at the same time.

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