Since it was first detected in China in late-2019, no country in the world has been safe from the coronavirus pandemic. A year and a half have passed since the virus has infected the world, but fortunately, vaccines are now readily available. While the global economy is now on the path to a post-recession recovery, governments are still implementing new lockdown measures and businesses are calculating their losses.
This article explores the global impact of coronavirus by assessing the situation in the countries that have been worst-hit by the pandemic:
United States of America
The COVID-19 virus has resulted in both an economic and a public health crisis. It has taken a toll on the health infrastructure and led to an economic slowdown.
The pandemic has been particularly destructive for small businesses, which make up the majority of the businesses in the United States and employ 50% of all private-sector workers. Sectors where employees were unable to work remotely and companies were not fit suffered the most.
The plunge in business activity caused many companies to become insolvent. As many as 420,000 small businesses failed since the very beginning. Damage to the labor market as a result of the pandemic has been the worst in US history.
The impact of coronavirus in India has been devastating in terms of economic activity and human lives. Domestic demand and exports have declined sharply, except for some exceptions where growth has been high.
The majority of India’s population comprises daily wage earners and self-employed informal sector workers who don’t have access to social security. These workers are experiencing income as well as food shortages.
The pandemic has revealed and worsened several vulnerabilities in the Indian economy. Factories, eateries, shops, business establishments, and transport services have been heavily affected.
Recession is on the cards as the economy is moving towards a full-year contraction. According to the surveys carried out by the Centre for Monitoring Indian Economy, the unemployment rate has risen in the range of 7.9%-12% in the April-June quarter of 2021. Millions of people have lost their jobs permanently.
Brazil’s economy faces a huge challenge due to the virus. The record of deaths in Brazil hit an all-time high in April 2021, with more than 4,200 fatalities within 24 hours.
While the impact of the recession can be felt throughout, smaller firms are the worst affected. This is because they involve substantial face-to-face interactions.
Inflation also rose as Brazil struggled with the second wave of coronavirus. This led to a steep rise in interest rates by the central bank. The 0.1% decline in the GDP of the country was worse than the median prediction of 1.2% growth.
UK’s GDP declined by 9.9% in 2020. Transport, tourism, hospitality, and arts and entertainment suffered the impact of coronavirus the most.
Economic growth during the summer of 2021 continued to be slow. This was first thought to be the result of the Delta variant as a large number of people were required to self-isolate.
Due to a disruption in global supply chains, some goods have become short in supply. Businesses are also reporting hardship in hiring employees.
As a result of supply issues, inflation rose during 2021. It is expected to continue to rise in 2022.
The Russian economy has been affected by the coronavirus in various ways. Almost half a million jobs were lost in three major sectors in 2020.
The national poverty rate increased by 13.2%. By October 2020, the unemployment rate shot up to 6.3% – the highest observed in Russia over the past 8 years.
The smaller cities suffered the most as they have frail health care systems. The construction and service sectors were hit the most. They had been a major source of employment for the impoverished cities.
The Mexican economy faced the largest contraction since the Tequila Crisis in 1994. In 2020, the output of service-related activities declined by 5.2%. The goods-producing industries faced a decrease in output by 0.5%.
Like other countries, the service industry was affected the most. This primarily includes businesses such as restaurants and hotels. Moreover, the government failed to provide adequate financial support for the economy.
The manufacturing sector has faced relatively few restrictions and avoided disturbance due to the impact on North American supply chains.
On the other hand, the service sector has been unable to recover as much. The absence of financial assistance left several businesses and households with a gaping income loss.
France’s economy faced an 8.3% decline in 2020. A recession of this extent had not been recorded in the country since WWII. For instance, the travel and tourism sector’s contribution to the economy declined by as much as 48.8% as a result of travel restrictions.
The unemployment rate reached a 2-year high due to the pandemic. Artisans, retail workers, and self-employed people suffered the most. Nonprofit organizations and food banks are involved in helping the impoverished in France.
According to French Finance Minister Bruno Le Maier, the economic growth of the French economy is based on its COVID-19 vaccination program. He predicted a 5% economic growth rate for the country in 2021.
The economic impact of the coronavirus has been felt all over the world. The magnitude of this global health crisis is greater than any during the past 100 years. It is increasing human suffering, killing people, and destroying economies. Countries need to adopt bold and urgent policy measures for economic recovery and financial stability. Hopefully, we are nearing the end of this crisis. We’ll just have to wait and see!