As it continues to send shockwaves, the COVID-19 pandemic has turned the world order upside down. The most devastating impact of the COVID-19 pandemic has been seen on the global economy.
The sudden stop on mobility and trade brought the world to a standstill as all economic and human resources were mobilised towards battling the coronavirus pandemic.
With COVID-19 being one of the biggest setbacks the international community had ever suffered, global GDP contracted by 5.2 per cent even when the pandemic was just gaining ground across the world in the middle of the year. This contraction only increased later in the year as the damaging effects of the pandemic were felt across populations and national economies.
Most nations tried to keep their economies afloat through monetary and fiscal support, but in vain. Employment and education, both very crucial for the growth of economy, suffered. Global trade had fallen and supply chains were broken, dealing severe blows to several sectors of the economy. The contraction of per capita income for the global population was at an all-time low.
Even the advanced and developed economies of the world saw an equally dismal deceleration in their economic growth rate. The contraction experienced by these economies went past 5% this year in comparison to 2.5% in developing economies.
With the search for a COVID-19 vaccine and fool-proof treatment for the disease gaining momentum in the later months of this year, economies around the world can finally be hopeful of a recovery starting early next year. As recovery rates are rising and treatments are becoming successful, the market and businesses are slowly returning to normalcy and will be seeing a positive trend of recovery and growth for the first time in a year.
Still global economic organisations such as the IMF have warned the people of a slow recovery as the countries’ economies continue to struggle under the waves of the COVID-19 threat. Countries worldwide still need aid in matters of health and economy as recovery cannot be possible without that. Although a global GDP growth of 5.2% is expected next year, it will be partial and uneven in some parts of the world and missing in others. No wonder the IMF has warned that recovery from this pandemic-induced recession is going to be difficult and time-taking.