Coronavirus-How the pandemic has changed the world economy.
The coronavirus pandemic has left national economies and businesses struggling, as governments try to tackle the spread of the virus with new lockdown measures. Despite the roll out of the new vaccine, it’s still a wonder how the world’s economy will ever recover after nearly 12 months of disruption. In this blog, we take a look at the worst hit areas, and how they are likely to get back on track in the months/years to come.
- Global Shares in flux.
During the first few months of the crisis the FTSE, Dow Jones Industrial Average and the Nikkei all saw huge falls as the number of Covid-19 cases grew in the first months of the crisis. The major Asian and US stock markets have recovered following the announcement of the first vaccine in November, but the FTSE is still in negative territory.
In response, central banks in many countries, including the UK, have slashed interest rates. That should, in theory, make borrowing cheaper and encourage spending to boost the economy. Some markets recovered ground in January this year, but this is a normal tendency known as the "January effect". Analysts are worried that the possibility of further lockdowns and delays in vaccination programmes might trigger more market volatility this year.
- A difficult year for jobseekers.
In the United States, the proportion of people out of work hit a yearly total of 8.9%, according to the International Monetary Fund (IMF), signalling an end to a decade of jobs expansion.
Millions of workers have also been put on government-supported job retention schemes as parts of the economy, such as tourism and hospitality, have come to a near standstill. The numbers of new job opportunities is still very low in many countries.
Job vacancies in Australia have returned to the same level of 2019, but they are lagging in France, Spain, the UK and several other countries.
- Most countries are now in a recession.
If the economy is growing, that generally means more wealth and more new jobs.
It's measured by looking at the percentage change in gross domestic product, or the value of goods and services produced, typically over three months or a year.
The IMF estimates that the global economy shrunk by 4.4% in 2020. The organisation described the decline as the worst since the Great Depression of the 1930s.
The only major economy to grow in 2020 was China. It registered a growth of 2.3%.
The IMF is, however, predicting global growth of 5.2% in 2021. That will be driven primarily by countries such as India and China, forecast to grow by 8.8% and 8.2% respectively.
Recovery in big, services-reliant, economies that have been hit hard by the outbreak, such as the UK or Italy, is expected to be slow.
- Travel is still far from taking off.
The travel industry has been badly damaged, with airlines cutting flights and customers cancelling business trips and holidays. New variants of the virus - discovered only in recent months - have forced many countries to introduce tighter travel restrictions. Data from the flight tracking service Flight Radar 24 shows that the number of flights globally took a huge hit in 2020 and it is still a long way from recovery.
- Pharmaceutical companies among the winners.
Governments around the world have pledged billions of dollars for a Covid-19 vaccine and treatment options. Shares in some pharmaceutical companies involved in vaccine development have shot up. Moderna, Novavax and AstraZeneca have seen significant rises. But Pfizer has seen its share price fall. The partnership with BioNTech, the high cost of production and management of the vaccine, and the growing number of same-size competitors have reduced the investors' trust in the company to have bigger revenue in 2021.
In conclusion, the huge question on everyone’s lips is how and when the economy will fully recover. As always, TyTek Industries will keep you informed and up to date with the latest industry developments. For information on delivery times and product turn-around, please contact one of our team! https://www.tytekindustries.com/contact
Reference :- https://www.bbc.co.uk/news/business-51706225