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Impact of Covid-19 on the World Economy

The coronavirus pandemic has shaken the global economy in 2021. Many companies are forced to reduce their activity. The only exception and a great example is top casinos New Zealand, which has become even more popular in 2020-2021. More than half of the world’s population has faced tough quarantine measures and movement restrictions. Never before in the history of mankind have these measures reached such a scale. In this post, you will learn about whether the economy can recover in 2022 and what role vaccinations will play.

The Scale of the Damage Caused by the COVID-19

Given the scale of the damage, COVID-19 has inflicted on the global economy; a full recovery is unlikely, UNCTAD fears. The economic impact “will be felt for a long time, especially among the poorest and most vulnerable social groups,” the UNCTAD report says. It also notes that the global poverty rate began to rise for the first time since the 1988 Asian financial crisis.

Experts say COVID-19 caused a shock to the global economy that hit the most vulnerable social groups hardest, namely:

  • Market growth has been limited;
  • Tourism was limited;
  • Broken economic ties;
  • Trade stopped;
  • Remittances were decreased.

In addition, COVID-19 has widened the welfare gap not only internationally but also within individual states.

Will Vaccines Help?

Almost all experts agree that economic recovery will largely depend on the effectiveness of vaccines. The most famous in the West are now three — from the companies Pfizer/BioNTech, Moderna, and the Oxford vaccine company AstraZeneca. Vaccines from Pfizer/BioNTech and Moderna have been shown to be more than 90 percent effective in later stages of clinical trials. Registration of vaccines is undergoing an accelerated procedure, on December 2, the UK announced the registration of the vaccine.

Pfizer, for example, said in early November that 50 million doses were produced in 2020, which allowed 25 million people to be vaccinated. Pfizer’s vaccine production climbed to 1.3 billion doses in 2021. Considering that the population of the Earth is about 7.5 billion people, this is not much.

Axel Weber, chairman of major investment holding UBS, said that even with the vaccine in place, the economic recovery will not be quick. “It will take at least a year to return to pre-crisis levels of GDP. It will take another year or two to achieve pre-crisis levels of unemployment and economic growth, so we have a very long recovery process,” Weber said in an interview with CNBC.

Strong Improves Positions in the Economy

In China, where the first case of coronavirus was recorded, economic growth has already been recorded. From July to September, the world’s second-largest economy grew 4.9 percent over the same quarter of the previous year. This is less than the projected 5.2 percent, but the dynamics of China’s GDP puts it at the forefront of the economic recovery from COVID-19.

A growth of almost 5 percent in 2021 is unprecedented progress against the backdrop of the hole, in which the Chinese economy found itself in early 2020 with the emergence of the pandemic. Analysts believe that the transition from the decline to the growth may indicate a successful policy of the authorities, which introduced an extremely strict quarantine regime and then took measures to stimulate production.

Experts’ Forecasts for the Near Future of the World Economy

The OECD estimates that global GDP grew by 5 percent in 2021. However, further growth in 2022 depends on a number of factors. The main influencing factors will be:

  • The likelihood of new outbreaks of coronavirus;
  • Compliance with quarantine measures and restrictions;
  • Confidence of consumers and companies in the future;
  • Correspondence and scale of government support to business needs.

The authorities will face a difficult choice: when to intervene and when to step back and let the market figure it out on its own, experts say. In addition, the authorities will need to find a balance that will support the economy without hindering it from transforming naturally. Some sectors will not revert to their previous state. It is necessary to avoid the zombification of companies that are no longer able to exist on their own.

Good News Network
Good News Networkhttps://goodsnewsnetwork.org
Founder and Editor-In-Chief at Good News Network
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