The Impact of COVID-19 on the global economy
The outbreak of COVID-19 pandemic across the world has completely disrupted the political, social, economic, religious, and financial structures of the world. The pandemic is having a noticeable impact on global economic development. The COVID-19 pandemic caused the largest global recession in history, with more than a third of the global population at the time being placed on lockdown.
Supply shortages are expected to affect a number of sectors due to panic buying, increased usage of goods to fight the pandemic, and disruption to factories and logistics. On the supply side, infections reduce labour supply and productivity, while lockdowns, business closures, and social distancing also cause supply disruptions. On the demand side, layoffs and the loss of income (from morbidity, quarantines, and unemployment) and worsened economic prospects reduce household consumption and firms’ investment.
Early estimates predicated that, should the virus become a global pandemic, most major economies will lose at least 2.9 percent of their gross domestic product over 2020. There is the fact that the crisis may have a clear end date when all restrictions can be lifted – this seems to be possible when the majority of the global population is vaccinated against COVID-19. It could then enable the global economy to experience a sharp rebound once the pandemic is over.
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