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Economic impact of the COVID-19 pandemic

For an associated topic, see COVID-19 recession.

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The COVID-19 pandemic caused far-reaching economic consequences[1] including the COVID-19 recession, the second largest global recession in recent history,[2] decreased business in the services sector during the COVID-19 lockdowns,[3] the 2020 stock market crash (which included the largest single-week stock market decline since the financial crisis of 2007–2008), the impact of COVID-19 on financial markets,[4][5][6][7][8][9] the 2021–2023 global supply chain crisis,[10] the 2021–2023 inflation surge, shortages related to the COVID-19 pandemic including the 2020–present global chip shortage, panic buying,[11][12][13][14] and price gouging.[15] The pandemic led to governments providing an unprecedented amount of stimulus, and was also a factor in the 2021–2022 global energy crisis and 2022–2023 food crises.

The pandemic affected worldwide economic activity, resulting in a 7% drop in global commercial commerce in 2020. Several demand and supply mismatches caused by the pandemic resurfaced throughout the recovery period in 2021 and 2022 and were spread internationally through trade.[16][17][18] During the first wave of the COVID-19 pandemic, businesses lost 25% of their revenue and 11% of their workforce, with contact-intensive sectors and SMEs being particularly heavily impacted. However, considerable policy assistance helped to avert large-scale bankruptcies, with just 4% of enterprises declaring for insolvency or permanently shutting at the time of the COVID-19 wave.[16]

Amidst the recovery and containment, the world economic system was characterized as experiencing significant, broad uncertainty. Economic forecasts and consensus among macroeconomics experts show significant disagreement on the overall extent, long-term effects and projected recovery.[19] A large general increase in prices was attributed to the pandemic. In part, the record-high energy prices were driven by a global surge in demand as the world quit the economic recession caused by COVID-19, particularly due to strong energy demand in Asia.[20][21]

  1. ^ The return of Keynesianism? Exploring path dependency and ideational change in post-covid fiscal policy. Policy & Society. Volume 41, Issue 1, January 2022, Pages 68–82
  2. ^ Kaplan, Juliana; Frias, Lauren; McFall-Johnsen, Morgan (14 March 2020). "A third of the global population is on coronavirus lockdown — here's our constantly updated list of countries and restrictions". Business Insider. Archived from the original on 26 June 2020. Retrieved 13 May 2020.
  3. ^ "Real-time data show virus hit to global economic activity". Financial Times. 22 March 2020. Archived from the original on 22 March 2020.
  4. ^ McLean, Rob; He, Laura; Tappe, Anneken. "Dow plunges 1,000 points as coronavirus cases surge in South Korea and Italy". CNN. Archived from the original on 27 February 2020. Retrieved 27 February 2020.
  5. ^ "FTSE 100 plunges 3.7 per cent as Italy confirms sixth coronavirus death". CityAM. 24 February 2020. Archived from the original on 25 February 2020.
  6. ^ Ahmed, Maruf Yakubu; Sarkodie, Samuel Asumadu (25 March 2021). "How COVID −19 pandemic may hamper sustainable economic development". Journal of Public Affairs. 21 (4): e2675. doi:10.1002/pa.2675. ISSN 1472-3891. PMC 8250371. PMID 34230816.
  7. ^ Smith, Elliot (28 February 2020). "Global stocks head for worst week since the financial crisis amid fears of a possible pandemic". CNBC. Archived from the original on 28 February 2020.
  8. ^ Imbert, Fred; Huang, Eustance (27 February 2020). "Dow falls 350 points Friday to cap the worst week for Wall Street since the financial crisis". CNBC. Archived from the original on 28 February 2020.
  9. ^ Smith, Elliot (28 February 2020). "European stocks fall 12% on the week as coronavirus grips markets". CNBC. Archived from the original on 28 February 2020.
  10. ^ Strumpf, Dan (31 January 2020). "Tech Sector Fears Supply Delays as Effects of Virus Ripple Through China". The Wall Street Journal. ISSN 0099-9660. Archived from the original on 31 January 2020.
  11. ^ Sirletti, Sonia; Remondini, Chiara; Lepido, Daniele (24 February 2020). "Virus Outbreak Drives Italians to Panic-Buying of Masks and Food". Bloomberg News. Archived from the original on 25 February 2020.
  12. ^ "Viral hysteria: Hong Kong panic buying sparks run on toilet paper". CNA. Archived from the original on 26 February 2020.
  13. ^ Rummler, Orion (17 February 2020). "Household basics are scarce in Hong Kong under coronavirus lockdown". Axios. Archived from the original on 26 February 2020.
  14. ^ "FDA anticipates disruptions, shortages as China outbreak plays out". Fierce Pharma. 17 February 2020. Archived from the original on 26 February 2020.
  15. ^ "Price Gouging Complaints Surge Amid Coronavirus Pandemic". The New York Times. 27 March 2020.
  16. ^ a b Bank, European Investment (18 May 2022). Business resilience in the pandemic and beyond: Adaptation, innovation, financing and climate action from Eastern Europe to Central Asia. European Investment Bank. ISBN 978-92-861-5086-9.
  17. ^ "Home". www.oecd-ilibrary.org. Retrieved 30 June 2022.
  18. ^ "Regional Economic Outlook". IMF. Retrieved 30 June 2022.
  19. ^ Bordo, Michael; Levin, Andrew; Levy, Mickey; Sinha, Arunima (27 January 2021). "Scenario analysis, contingency planning, and central bank communications". VoxEU.org. Retrieved 27 January 2021.
  20. ^ "Covid is at the center of world's energy crunch, but a cascade of problems is fueling it". NBC News. 8 October 2021.
  21. ^ Ambrose, Jillian (19 September 2021). "UK energy market crisis: what caused it and how does it affect my bills?". The Guardian.

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