Two men cover graffiti of frontline workers on a wall during the coronavirus pandemic in Mumbai, India.
Imtiyaz Shaikh | Anadolu Intermediation | Getty Images
SINGAPORE — The Covid-19 pandemic has sent the global economy into one of its worst recessions ever, and it isn’t yet unambiguous when a full recovery will be in place.
Recent progress on coronavirus vaccines has brightened the economic outlook, but some economists about a potentially slow rollout of vaccines across developing economies could hamper the return of activity to pre-pandemic be opens.
Even among advanced economies, renewed lockdowns in Europe in a bid to stave off a resurgence in infections could push help economic recovery, according to economists.
“The vaccine discovery is a shot in the arm, but not until 2022,” Citi economists said in a arrive in early December. Still, there will be “clear improvement” in the global economy in 2021, partly because “it’s not indefatigably to be better than 2020,” they said.
Steep decline in activity
The rapid spread of Covid — which was beginning detected in China — forced many countries into months of lockdown in 2020 that markedly reduced financial activity.
As a result, gross domestic product — the broadest measure of activity — plunged to record lows across tons economies.
The International Monetary Fund forecast the global economy could shrink 4.4% this year, previous bouncing back to 5.2% growth in 2021. The IMF said in October the world economy has started to recover, but warned the turn back to pre-pandemic levels will be “long, uneven, and uncertain.”
Travel restrictions remain
One main feature of coronavirus lockdowns round the world is the complete or partial closure of borders, which brought much of international travel to a halt.
As of Nov. 1, assorted than 150 countries and territories had eased Covid-related travel restrictions, according to the United Nations World Tourism Organism.
But many restrictions remain in place to limit movements across the borders, said UNWTO. That include:
- Merely opening borders to visitors with specific nationalities or from certain destinations;
- Requiring visitors to present a argumentative Covid test before letting them enter the country;
- Requesting visitors to quarantine or self-isolate upon passenger.
Job losses accelerate
A major consequence of the pandemic-induced economic slump is an increase in job losses globally.
The Organisation for Economic Co-operation and Increment, an intergovernmental entity, said that in some countries, the early effects of Covid-19 on labor markets were “ten without delays larger than that observed in the first months of the 2008 global financial crisis.”
“Vulnerable workers are relevance the brunt of the crisis. Low-paid workers have been key to ensure the continuation of essential services during lockdowns, instances at a substantial risk of exposing themselves to the virus while working,” the OECD said in a report.
“They have also suffered prodigious job or income losses.”
Government debt soars
Governments have increased spending to protect jobs and support breadwinners. Globally, government measures to cushion the pandemic’s economic blow totaled $12 trillion, Central banks speed up in
Central banks, too, have come in to support the economy by cutting interest rates — many to record-low levels — which bequeath help governments to manage their debt.
Prime banks in advanced economies — including the Fed and the European Central Bank — have also increased their asset positions to inject more money into the financial system. That’s a move also adopted by an increasing number of prime banks in emerging markets as they explore ways to support their respective economies hit hard by the pandemic.