Economic Impact of Covid-19 on countries across the World!
The Covid-19 pandemic that started in China in late December has infected people across 188 counties claiming close to a million lives. Its spread has left even the large economies crumbling with businesses counting costs leaving them wondering what recovery could look like. With nations releasing their growth numbers one by one, the situation is worsening with many nations witnessing the economic fall in such scale in a few decades. In today’s blog, we’ll look into the economic impacts that countries across the world have suffered due to the pandemic.
Australia in first recession since 3 decades
The Australian economy has plunged into its first recession in nearly 3 decades, as it suffers the economic fallout from the pandemic. GDP of the country shrank 7% in the April-to-June quarter compared to the previous three months. This is the biggest fall since records began back in 1959 and comes after a fall of 0.3% in the first quarter.
An economy is considered to be in recession if it sees two consecutive quarters of negative growth. Australia was the only major economy to avoid a recession during the 2008 global financial crisis — mainly due to demand from China for its natural resources. At the start of this year, the economy was hit by falling economic growth due to an extreme bush fire season and the early stages of the coronavirus outbreak.
More recently the shutdowns of businesses across the country have taken their toll, despite measures by the government and central bank to support the economy. This is the worst economic growth in 61 years due to a severe contraction in household spending on goods and services.
India GDP shows worst quarterly slump in decades
The economy shrank 23.9%, its worst slump since the country started releasing quarterly data in 1996. The coronavirus pandemic and a grinding lock down caused massive disruptions to economic activity during the quarter.
Experts fear that India is staring at a recession — that will happen only if it reports contraction in the next quarter as well, which experts say is likely. India was last in recession in 1980, its fourth one since independence.
India has recorded more than 4.1 million Covid-19 cases so far — on Sunday it reported 90k+ new cases in 24 hours, the world’s highest single-day increase.
But the country continues to reopen because, experts say, a second lock down is economically unviable. And the effects of the first lock down are evident in the latest GDP figures. The numbers aren’t surprising given that the lock down was in effect for most of the quarter in question — April to June.
Japan’s economy falls into recession as virus takes its toll
Japan has fallen into recession for the first time since 2015 as the financial toll of the coronavirus continues to escalate. The world’s third biggest economy shrank at an annual pace of 3.4% in the first three months of 2020. The coronavirus is wreaking havoc on the global economy with an estimated cost of up to $8.8tn (£7.1tn). Japan did not go into full national lock down, but issued a state of emergency in April which severely affected supply chains and businesses in the trade-reliant nation.
The 3.4% fall in growth domestic product (GDP) for the first three months of 2020, follows a 6.4% decline during the last quarter of 2019, pushing Japan into a technical recession.
German economy shrinks at record pace
The German economy contracted at its steepest rate on record in the second quarter as consumer spending, company investment and exports all collapsed during the peak of the COVID-19 pandemic, wiping out nearly 10 years of growth. The Federal Statistics Office said gross domestic output in Europe’s largest economy shrank by 10.1% quarter-on-quarter from April to June after a revised 2.0% contraction in the first three months of the year.
The plunge was the steepest since the office began collecting quarterly growth data in 1970 and was worse than the 9% contraction predicted by economists in a Reuters poll. Adjusted for inflation, seasonal and calendar effects, it erased almost a decade of growth, the statistics office said.
Taiwan narrowly avoid recession
Taiwan narrowly dodged a recession in the third quarter even as the economy contracted for the first time since the global financial crisis, with exporters suffering a crippling blow from faltering global demand and a slowdown in mainland China.
The worse-than-expected 1.01 per cent slump in July-September gross domestic product was the first year-on-year contraction in six years and prompted the government to announce a NT$4.08 billion (HK$967 million) stimulus package to boost domestic consumption over the short term. High-tech manufacturers in Taiwan’s trade-reliant economy have been hurt by faltering demand in regional powerhouse mainland China, along with other exporters from Singapore to Japan to Brazil.
We have tried to show you the economic impact the World is showing with few examples of major economies. While smaller economies have been hot hard too, the recovery is still far from reality. It’s only evident to embrace what’s about to come.