The Impact of Coronavirus on the Global Economy

COVID-19 brought the global economy to a sudden stop, causing shocks to supply and demand. Starting in January 2020, country after country suffered outbreaks of the new coronavirus, with each facing epidemiological shocks that led to economic and financial shocks as a consequence. How quickly and to what extent will national economies recover after the pandemic has passed? This will depend on success in containing the coronavirus and on exit strategies, as well as on the effectiveness of policies designed to deal with the negative economic effects of the coronavirus. The impact of coronavirus on the global economy will extend beyond 2020. According to forecasts from the International Monetary Fund and World Bank, GDP per capita at the end of 2021 is still expected to be lower than December 2019 in most countries. Emerging markets and other developing countries, in addition to facing difficulties in dealing with their own coronavirus outbreaks, have suffered additional shocks from abroad. In their cases, the new coronavirus brought a perfect storm. One can foresee a post-coronavirus global economy marked by higher levels of public and private debt, acceleration in digitization processes, and less globalization.

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