• April 16, 2024

Coronavirus: How the pandemic has changed the world economy

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By Lora Jones, Daniele Palumbo and David Brown
BBC News

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The coronavirus pandemic has reached almost every country in the world.

Because of its spread, economies and businesses have been counting the cost as governments grapple with new lockdown measures to combat the spread of the virus.

Despite the development of new vaccines, many still wonder what recovery might look like.

A selection of charts and maps are provided here to help you understand the economic impact of the virus so far.

Global shares in change

Large changes in the stock markets where stocks are bought and sold by companies can affect the value of annuities or individual savings accounts (ISAS).

The FTSE, Dow Jones Industrial Average, and Nikkei saw huge declines as the number of Covid-19 cases increased in the first few months of the crisis.

Major Asian and US equity markets have rallied after the first vaccine announcement in November, but the FTSE is still in negative territory.

The FTSE fell 14.3% in 2020, his worst performance since 2008.

In response, central banks in many countries, including the UK, have lowered interest rates. That should theoretically make borrowing cheaper and encourage spending to stimulate the economy.

Some markets rebounded in January this year, but this is a normal trend known as the “January Effect”.

Analysts fear the possibility of further bans and delays in vaccination programs this year could lead to higher market volatility.

A difficult year for job seekers

Many people have lost their jobs or cut their incomes.

Unemployment rates have risen in the major economies.

In the United States, the unemployment rate was 8.9% annually, according to the International Monetary Fund (IMF), marking the end of a decade of employment expansion.

Millions of workers have also taken advantage of government-sponsored job-retention programs as parts of the economy such as tourism and hospitality nearly stalled.

The number of new job opportunities is still very low in many countries.

Job vacancies in Australia have returned to the same level as in 2019, but are lagging behind in France, Spain, the UK and several other countries.

Some experts have warned that it could take years for employment levels to return to pre-pandemic levels.

Most countries are currently in recession

Generally speaking, when the economy grows, it means more wealth and more new jobs.

The measurement is based on the percentage change in the gross domestic product or in the value of the goods and services produced, typically over three months or one year.

The IMF estimates that the world economy contracted by 4.4% in 2020. The organization described the decline as the worst since the Great Depression in the 1930s.

The only major economy that grew in 2020 was China. It recorded a growth of 2.3%.

However, the IMF is forecasting global growth of 5.2% for 2021.

This is mainly driven by countries like India and China, which are expected to grow by 8.8% and 8.2% respectively.

The recovery is expected to be slow in large, service-dependent economies that have been hard hit by the outbreak, such as the UK or Italy.

Travel far from the start

The travel industry has been badly damaged as airlines cut flights and customers cancel business trips and vacations.

New variants of the virus, discovered only in the past few months, have forced many countries to introduce stricter travel restrictions.

Data from flight tracking service Flight Radar 24 shows that the number of flights has increased sharply worldwide in 2020 and is still far from recovering.

The hospitality sector has closed its doors worldwide

The hospitality sector has been badly hit, with millions of jobs and many companies bankrupt.

Data from Transparent – an industry-leading intelligence company covering over 35 million hotel and rental listings worldwide – has seen a decline in reservations in all top travel destinations.

Billions of dollars were lost in 2020, and while the forecast for 2021 is better, many analysts believe that international travel and tourism will not return to normal pre-pandemic levels until around 2025.

Shopping … at home

Retail traffic has dropped unprecedented as shoppers stayed home.

New variants and surges have made the problems worse.

According to research firm ShopperTrak, pedestrian numbers have continued to decline since the initial lockdown.

Separate research suggests that consumers are still scared of going back to the shops. Accounting giant EY 67% of customers say they are not ready to travel more than 3 miles to shop now.

This change in shopping behavior has given online retail a significant boost, with global sales of $ 3.9 trillion in 2020.

Pharmaceutical company among the winners

Governments around the world have pledged billions of dollars for a Covid-19 vaccine and treatment options.

Shares in some of the pharmaceutical companies involved in vaccine development have increased.

Modern, Novavax and AstraZeneca recorded significant increases. At Pfizer, however, the share price has fallen. The partnership with BioNTech, the high cost of manufacturing and managing the vaccine, and the growing number of equally sized competitors have reduced investor confidence in the company in order to generate higher revenues in 2021.

A number of pharmaceutical companies have already started handing out doses and many countries have started their vaccination programs. Many more – like Johnson & Johnson and Sanofi / GSK – will join the vaccine distribution in 2021.

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