This COVID-19 pandemic has troubled almost every country in the world. Its spread has impacted national economies and businesses counting the costs, as governments struggle with new lockdown measures to overcome the spread of the virus. Though new vaccines are developed, many countries are still wondering what recovery can be like. Now we will tell you about how this COVID-19 pandemic has impacted the global economy.
1. Global shares in inconstancy
Due to the pandemic, there have been big shifts in stock markets, where shares in companies are bought and sold which can affect the value of pensions or individuals savings accounts (ISAS). The FTSE (Financial Time Stock Exchange), Dow Jones Industrial Average and the Nikkei all saw huge falls as the cases of COVID-19 rapidly increased in the first month of the crisis. The major Asian and US stock markets have recovered following the announcement of the first vaccine in November, but the FTSE is still in a bad state. It dropped 14.3% in 2020 which was its worst performance since 2008. In response, the central banks in many countries, including the UK, have gashed interest rates. In theory, that should make borrowing cheaper and encourage spending to boost the economy. Few markets have recovered their ground in January this year but this is known as the “January effect”. Further lockdowns and delay in vaccination programmes can trigger more market volatility this year.
2. Struggling time for a job person
Due to the pandemic, many people across the globe have lost their jobs or have seen a drastic drop in their salaries. The unemployment rates have risen across major economies. In the United States (US), the ratio of people out of work had hit a yearly total of 8.9%. The International Monetary Fund (IMF) signals the end to a decade of job expansions. A lot of workers had also been put on government-supported job retention schemes as parts of the economy such as terrorism and hospitality have come to a near standstill. The number of unemployees is still very high in many countries. Job vacancies in Australia have returned to the same level of 2019 and are lagging in France, Spain, the UK and several other countries. Few experts have warned that it could be years before levels of employment return to those seen as before the pandemic.
3. Many countries are in recession
The growth of economies generally means more wealth and more new jobs. That’s measured by looking at the percentage change in the gross domestic product (GDP) or the value of goods and services produced over three months or a year. The International Monetary Funds (IMF) estimates that the global economy has fallen by 4.4% in 2020. IMF described the decline as the worst since the Great Depression of the 1930s. China was the only major economy to see growth by registering a 2.3% increase in 2020. Only two countries India and China forecasted to grow 8.8% and 8.2% respectively. The UK and Italy are expected to be slow in recovering services-reliant, economies that have been majorly affected by the outbreak.
4. Fall in Tourism
The travel industry has been admitting major damage with airlines cutting flights and customers cancelling business trips and holidays. The new variant caused many countries to introduce more tight travel restrictions. The flight radar 24 revealed that the number of flights globally suffered huge damage in 2020 and is very far from recovery.
5. Hospitality sector has closed its door worldwide
This sector has suffered a huge blow with millions of jobs and many companies. An industry-leading intelligence company that covers 35 million hotels and rental listings worldwide saw a fall in reservation in all the top travel destinations. Billions of dollars have drowned in 2020 and its condition for 2021 is better. Many analysts believed that international travel and tourism won’t return to the normal pre-pandemic levels until 2025.
6. Shopping from home
Shopping retail has seen unpredictable falls as many customers stayed at home. The new variants have made the problem worse. The pedestrian number has shrunk since the first lockdown as per ShopperTrek. The accountancy giant EY says that 67% of customers are now willing to travel not more than 5km for shopping. This helped online shopping retail to boost up to $3.9 trillion in 2020.
7. Bonus for pharmaceutical companies
Governments across the globe have invested billions of dollars for a COVID-19 vaccine and treatment options. There has been a significant rise in Moderna, Novavax and AstraZeneca. On the other hand, Pfizer vaccine’s share price has fallen. The alignment with BioNTech helped the high cost of production and management of the vaccine and the growing number of same-size competitors have reduced the investors’ trust in the company to have bigger revenue in 2021. Many pharmaceutical companies have started distributing doses and have started their vaccination programs.