COVID-19 impact on economic level
By the Policy, Research and Statistics Department, UNIDO. This brief is produced by a team consisting of Nicola Cantore (lead), Frank Hartwich, Alejandro Lavopa, Keno Haverkamp, Andrea Laplane, and Niki Rodousakis.
Introduction
Widespread economic losses
The economic crisis unleashed by the outbreak of COVID-19 is hurting economies, regardless of income level. The most recent data from UNIDO’s seasonally adjusted Index of Industrial Production (April 2020 vs December 2019) indicate that both lower- and upper middle-income countries have been significantly impacted by COVID-19.
A health pandemic or a pandemic for the economy? April 2020 and some early evidence of firms’ perceptions
Source: UNIDO elaboration based on our Statistic Data Portal.
Economic losses are not correlated to health impacts
Recent data from the Centre for Systems Science and Engineering at Johns Hopkins University show that the spread of the pandemic in terms of case numbers and deaths is quite asymmetric across countries. Sub-Saharan Africa, for example, one of the poorest regions in the world, does not seem to have been severely impacted by COVID-19.
A health pandemic or a pandemic for the economy? April 2020 and some early evidence of firms’ perceptions
Source: Centre for Systems Science at the Engineering at John Hopkins University
A study by Noy et al. (2020) finds that the direct costs of the COVID-19 pandemic associated with illness and mortality are lower than the indirect losses caused by the crisis. A low impact of COVID-19 in terms of case numbers and deaths does not necessarily translate into a low economic impact.
Many countries are experiencing a recession, even though COVID-19 has not had a serious effect on them in terms of health. Even minor public health events can severely affect firms in lower income countries due to their poor socio-economic conditions (vulnerability) and their weak capacity to respond to crises (resilience). Moreover, in a globalized world, many countries are suffering indirect consequences from value chain disruptions and lower international demand for goods due to widespread
Industrial production and trade: the situation in April 2020
Huge economic losses are not necessarily associated with high health impacts
We use recent data derived from UNIDO’s Index of Industrial Production (IIP) for our analysis of 49 countries representing around 87 per cent of world manufacturing value added (MVA). A comparison of IIP data (adjusted to take seasonal effects into account) for March 2020 vs December 2019 shows that approximately 81 per cent of countries have experienced a decrease in industrial production of 6 per cent on average. A comparison of data for April 2020 vs December 2019 reveals that industrial production fell by 20 per cent on average in 93 per cent of countries. Countries with a similar number of COVID-19-related deaths may experience different levels of economic loss, depending on the severity of the containment measures implemented or their indirect effects,(UNIDO,2020).
Apart from economic impact there social impact like death, separation of family, insecurity level increase as well as famine and hunger spreads in the society
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