Impact of COVID-19 on the Economy

Impact of COVID-19 on the Economy

The following article covers the Social & Economic Impact of COVID-19.

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It has exactly been a year and five months since we’ve been embracing the ‘new normal’ under the name of COVID-19. Even after countless measures and efforts undertaken by governments and health organizations, the pandemic still looms at large. COVID-19 has changed our lifestyles in some of the most unimaginable ways. But, what it has probably affected the most are entire Economies around the world. Initially, the outbreak began with a state of panic around the globe. The demand shot up as the supply chain was affected, with people trying to stock everything up for themselves. This particular event initiated a Domino Effect and influenced the key areas.

Share Market: Every industry in the world experienced a plunging dip in their respective share prices and caused a global flux. But there was an exception amongst these sectors. While every industry in the world continued to struggle, the Pharmaceutical sector reached its peak, and rightly so.

Jobs: It was one of the worst affected sectors due to the pandemic. According to Asia-Pacific Employment and Social Outlook 2020, the economic backlash of the COVID-19 pandemic wiped out some 81 million jobs in 2020. There are still uncertainties as organizations have adapted to the changing circumstances leading to a reduction in the job roles. The number of new job opportunities is distressed in most countries as a result, a majority of them are in a recession.

Travel: With flights being cancelled by the airlines and fliers/travellers cancelling business trips and vacations, the travel industry got severely damaged. In 2020, the number of flights worldwide plummeted, and it is still a long way from recovery. Emerging variants of the virus only made countries enforce stringent restrictions. Travel restrictions are unlikely to be relaxed anytime soon.

Hospitality: Amid the initial scare of the virus, restaurants, bars, hotels saw fewer and fewer customers every passing day before countries went into complete lockdown. Millions of jobs were lost in the hospitality industry, as many businesses went bankrupt. The global tourism industry crumbled down losing billions of dollars. According to analysts, the forecast for 2021 appears to be improving but, travel and tourism will not return to pre-pandemic levels until about 2025.

Shopping: One of the worst impacts of this pandemic was toward in-store shopping. Shoppers stayed at home and preferred to purchase online, causing retail footfall to plummet. The notion of window shopping was lost when the volume of pedestrians decreased due to the surge in cases.

Pharmaceutical Companies: Pharmaceutical firms triumphed and benefited the most in this unforeseen race against time and adversity. Vaccines and treatment options for Covid-19 received billions of dollars in pledges from governments all over the world. Some pharmaceutical firms involved in vaccine development saw their stock prices rise.

Economic disturbances like the 2020 coronavirus pandemic occur only every few generations and cause lasting and far-reaching changes. The global economy has been devastated by this pandemic. Developed countries have pumped unprecedented amounts of fiscal stimulus into the economy, driving public debt ratios to a new high. Meanwhile, long-term development prospects remain bleak, raising concerns about the sustainability of such high debt levels and the global ramifications of the current scenario.

In terms of growth, the global economy is well on its road to recovering from a downturn that few of the world’s 7.7 billion people have witnessed in their lifetimes. Vaccines have speeded the recovery in 2021. Other Covid-19 legacies, on the other hand, will affect global prosperity for years to come.

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