Before we go any further with today’s topic, it is important for us to acknowledge how the novel spread of coronavirus has affected the financial stability of countries globally? The pandemic has shattered the economy of many countries. Creating challenges and impacting the lives of people in everyday life.

Economic contractions in a post-COVID-19 will lead to a decline in consumer or you can say end-user spending such as higher education payout.

Families going through financial problems or facing an uncertain economic future will be reluctant to send their children to expensive schools. University and colleges students will continue to have an incompetent online learning experience.

ECONOMIC IMPACTS OF COVID-19

❖ In May 2020, the Asian development bank stated that the novel spread of Coronavirus could cost the world economy somewhat around $5.8 and $8.8 trillion.

❖ President of the European Central Bank, Christine Lagarde, apprised in April 2020 that the economy of the Eurozone could reduce by as much as 12% in 2020. And in August there were more than 15 million unemployed people in the European Union.

❖ The gross domestic product for the United States according to the Bureau of Economic Analysis has decreased at an annual rate of 48% for the first quarter of 2020 and 32.9% in the second quarter. Compared to 2019, consumer spending has decreased to 10% in 2020.

❖ In the second quarter of 2020, the economy of the United Kingdom contracted to 20.4%.

❖ In the second quarter of 2020, and after almost 30 years of growth, Australia fell into a recession after its economy reduced to 7%.

❖ In August 2020, South Korea officially entered into a recession, the first time in 17 years.

❖ It is projected that the Latin American economies will decline by 9.4% this year.

CORONAVIRUS: PANDEMIC & THE CHANGE IN THE WORLD ECONOMY

As we all know, the spread of the novel coronavirus; pandemic has reached and has affected the economy of almost every country on the globe. The spread of the novel Coronavirus has left the economies and businesses counting the costs of many countries all around the globe, as the government struggles with the new measures to fight the spread of COVID-19 and the falling economy.

★ ECONOMIC IMPACTS SO FAR

➢ Global shares are in flux: We have seen huge shifts in the stock markets after the spread of COVID-19. The Financial Times Stock Exchange, the Nikkei, and Dow Jones Industrial Average all saw huge falls as the number of the novel Coronavirus cases grew in the starting months of the crisis. After the announcement of the first vaccines in the month of November, the major countries and economies such as the United States and the Asian stock market have seen to be recovered, but the Financial Times Stock Exchange is yet to recover, as it is still in negative territory. The Financial Times Stock Exchange reduced to 14.3% in the year 2020, which is said to be the worst performance since the year 2008. In support, in many countries including the UK, central banks have slashed interest rates to make borrowing cheaper and to encourage consumers, businesses, and marketers to spend, which will help boost the economy.

➢ Tough time for Job seekers: Many people have lost their job in this pandemic after the spread of the novel coronavirus. Unemployment rates have increased in many countries and economies. According to the IMF (International Monetary Fund), the proportion of people out of work marked a yearly total of 8.9% in the United States, pointing at an end to a decade of jobs expansion. In many countries, the number of new job opportunities are still very low.

➢ Countries are now in economic decline: The growing economy indicates more wealth and more job opportunities. The growth in the economy is measured by the percentage change in gross domestic product or the amount of commodities and services produced over a year. The international monetary fund evaluated the world economy to be reduced by 4.4% in 2020. China was the only major economy to grow in 2020 with a registered rate of 2.3%.

➢ Travel Industry: The travel industry has been badly affected after the spread of the COVID-19 virus with airlines reducing flights and the customers canceling their business trips and vacations. With the spread of the coronavirus and with the discoveries of its new variants in recent days, have forced governments of many countries to implement strict rules on public safety, and to restrict foreign travel activities to avoid any further damage.

➢ Hospitality Sector: With millions of jobs and many companies going bankrupt, the hospitality sector has been hit really hard and affected the lives of millions of people worldwide. Information from Transparent- a sector-leading intelligence company that covers more than 35 million hotel and renting listings all over the globe has registered a fall in reservation in all top travel destinations. Billions of dollars have been lost in the pandemic in 2020. According to many experts and analysts, it is stated that tourism won’t return to normal until 2025.

CONCLUSION

In the above article, we have summarized events that took place during the outburst of the Novel Coronavirus and the challenges the world has to face, and how it affected the world economy? We hope you find this article informative. For any query related to the import-export trade data, feel free to connect to us at info@eximtradedata.com.