Posted ByJohnDecember 2019, in Wuhan, China is identified and confirmed the first case of the coronavirus infection, later named COVID-19. At that time, the world was not ready to believe that this mysterious disease would turn into a global pandemic within a few months. The huge influx of people traveling to and from China, as well as the stubborn neglecting of the problem in the beginning, led to a progressive increase in the number of new positive cases on all continents. SARS-CoV-2 spread incredibly fast regardless of the measures taken by the various governments. Well, that’s a story painfully familiar to everyone, but the purpose of this article is not the pandemic or the virus itself. In the next lines, we will try to summarize the impact of COVID-19 on the biggest economies around the world. At the beginning of 2022, the situation has begun to return back to normal, but major industries have to search for ways to recover.
Direct Impact Over the Key Economic Elements
One of the actions taken by many countries in Europe, Asia, Africa, and the Americas was a partial or full lockdown. Australia is one of the countries still applying the most severe countermeasures in that regard. We can’t say that the lockdown was successful, but it at least allowed the governments to control the situation. Unfortunately, one of the side effects was a serious reduction in economic activity. Many sectors were forced to transform and start producing different types of merchandise in order to survive. Nevertheless, many small businesses were unable to adapt and closed for good.
In a result, the global GDP declined by 6.70% in 2020, but the slow down was not the same for everyone. The large and still developing countries from South America felt a more severe impact, reaching and exceeding 8.5% or tens of billions of dollars. Moreover, the rate of unemployment increased sharply during the first year after the pandemic outbreak. From roughly 187 million unemployed people worldwide, at the end of 2019, to over 220 million during 2020. The central banks of the advanced and emerging economies fought back by lowering the interest rates!
Stock Markets During the Pandemic
The stock markets are the beating heart for many economists who are able to see world events and their consequences reflected in the major indices charts. Substantial losses occur on almost every one of them, reaching 21% down for the UK share FTSE 100. The US tech S&P 500 performed better, but together with the other major US index, NASDAQ also went on a red territory for a long period of time. The biggest issue, however, was not the lost positions but the uncertainty and panic caused by the announced lockdowns. Still, the Bulls felt the wind of change after the middle of 2021.
Major Industries and GDP Growth
The quarantines and anti-COVID-19 measures had a devastating impact on the largest economies. The rest of the world is more or less connected to these countries and were doomed to feel the negative effect, too, albeit with a slight delay. According to data delivered by the World Bank, the United Kingdom suffered the worst consequences, additionally enhanced by Brexit. The UK’s GDP growth indicator for 2020 is -9.7% compared to 2019, going down to $2.76 trillion. Other major economies experiencing negative GDP growth results are:
- United States – minus 3.6%
- Japan – minus 4.6%
- India – minus 7.3%
- France – minus 7.9%
- Italy – minus 8.9%.
China, where it all started, is the only country in the top economies to show growth – 2.3%, up to a nominal GDP of $14.72 trillion. However, if we take a look at the other indicator, showing the Purchasing Power Parity adjusted GDP, the progress is even more impressive – $24.27 trillion. In 2021, the world economy woke up after many measures were eased. For example, the global merchandise imports index jumped to almost 200 basis points. Its value for the US stood at 127 basis points! The exports follow the trend but at a slower pace!
Asia, Europe, and the USA
China managed to put the COVID-19 pandemic under control relatively quickly or at least we saw that on the TV. No matter what the truth was, the fact is that China has recovered fast and shows a positive GDP growth for each year from 2019. Preliminary reports for 2022 show more than 5 new percentages on top. However, the rest of the Asian economies don’t perform so well. India, Japan, South Korea, and Russia have significantly reduced economic indicators. The situation in Europe is not better! The United Kingdom and all EU countries reported negative GDP results for 2020 and 2021, between 3.3% and 7.9%.
The projected 2022 growth of around 4% for the Eurozone, including 5.9% for Malta, is false as it’s based on one of the worst years in decades. Even after this recovery, Europe will be below the levels of all economic indicators from before the pandemic outbreak. From this point of view, the impact continues during the current year as well! The most corona-damaged US industries are food, retail, travel, and transportation. In 2020, a steady share of about 11% of all jobs in the Leisure and Hospitality industry were at risk, or more than 16 million people.
Conclusion
We can continue with more and more data and statistics on how devastating the coronavirus pandemic was, and it still is. We must never forget what a single mistake could do to the whole of humanity. We have to stay focused and avoid situations like the one escalated from Wuhan in 2019!