Effects of Covid-19 on the Economy

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Coronavirus economic impact concept image

The covid-19 pandemic has changed the economic situation which also affects every individual more especially in business.

The effects of the pandemic have caused many people to lose their jobs or seen their incomes cut. There is high rate of unemployment that have increased across major economies. 

According to the International Monetary Fund (IMF), in the United States, the proportion of people out of work hit a yearly total of 8.9%, signaling an end to a decade of jobs expansion. Millions of workers have also been put on governments supported job retention schemes as parts of the economy, such as tourism and hospitality have come to a near standstill. The number of new job opportunities are very low in many countries. The Job vacancies in Australia have returned to the same level of 2019, but they are lagging in France, Spain, the UK and several other countries. China was the only country that recorded major economic growth in 2020, it registered a growth of 2.3%.

The IMF predicting global growth of 5.2% in 2021. That will be driven primarily by countries such as India and China, forecast to grow by 8.8% and 8.2, respectively. Recovery in big, service reliant, economies that have been hit hard by the outbreaks, such as the UK or Italy is expected to the slow. The economy affected the travel industry which irreparably damaged with airlines cutting flights and customers cancelling business trips and holidays.

Covid19 hit the economy of Cyprus. In 2019, the Cyprus debt to GDP (Gross Domestic Product)  ratio reached 95%. That is expected to reach 105% by the end of 2020, according to Trading economic, against a backdrop of a 7.4% decline in GDP growth. The European Commission (EC) spring Economic Forecast reported that the Covid19 crisis is set to push the economy into severe recession in 2020, with the real GDP forecast to contract by  7.5% in 2020 before bouncing back with growth of around 6% in 2021.          

Sources:
https://www.bbc.com/news/business-51706225
https://www.icaew.com/insights/features/2020/july-2020/begin-again-cyprus

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