Economic Impact of COVID-19

The outbreak of COVID-19 has disturbed the economic, social, political, and financial structures throughout the world. World’s major economies such as the U.S., UK, Germany, France, China, Italy, Japan, and many others are at the edge of downfall. It has been observed that in the U.S. 3.3 million people applied for unemployment and a week later another 6.6 million people started searching for jobs. Considering the current staggering situation G-20 nations called the meeting to discuss descending conditions

The economic tremor of COVID-19 pandemic unavoidably calls for the comparison to the global financial crisis of 2008-2009 but still is very different in others. As in 2008-2009, governments intervened with fiscal and monetary policies to provide temporary financial aid to households and businesses. But, today labor supply, travel, and transport are directly affected by barriers such as restriction on movement and maintaining social distancing so as to slow down the spread of disease which was not the case during 2008-2009 financial crisis

It has been analyzed that after the 2008-2009 financial crisis, the trade curve never restored to its previous trend. Furthermore, all regions except Africa, Middle East, and CIS will suffer double-digit declines in export as well as imports in the year 2020. However, a strong rebound has been estimated if consumers and businesses consider this pandemic as a temporary scenario and the pandemic is bought under control, most of the regions could expect a double-digit rebound in 2020 of approximately 21.0%

Source: WTO

Global merchandise trade was hampered in 2019 wherein 2019 trade quarter 4 was decreased by 1.0% year-on-year and by 1.2% as compared to the 2019 trade quarter 3. The slowing down of trend has been greater in the recent quarters

Source: WTO

South America and other regions experienced a huge downfall in exports second half of 2019, whereas Europe, North America, and Asia posted either slight growth or mild decline

Source: WTO

Furthermore, sharp decline has been noticed in import volumes for South America, Europe, and North America in the year 2019. Only imports for Other Regions indicated continuous growth for each quarter placing between 1.9% and 4.9% in 2019

Source: WTO