It is a known fact that the coronavirus pandemic led to a major setback to the world economy. Many people became unemployed due to lockdowns in various countries. Meanwhile, a major question arises in this situation. How much more the economy will suffer due to the pandemic.
The Organisation for Economic Co-operation and Development (OECD) answered this question recently. According to the organization, the world will not recover from the set-back to the economy during the coronavirus pandemic.
The virus caused an economic loss of $7trn this year in comparison to the growth of the economy otherwise. Meanwhile, experts predicted growth in some world economies in the future. The UK is one of those countries that will experience an increase in economic growth. However, this will not happen immediately and take time.
The experts also suggest that China is the only country in the world to have economic growth this year. The rest of the countries will only experience a shortfall in income.
Currently, many countries also fear another coronavirus wave. In such a condition, the public healthcare system and the economy will suffer even more. It can also shatter the prospects of recovery in economic growth within the next year.
According to the organization, if the virus subsides sooner than anticipated, it can lead to better financial conditions next year. It depends on how long the virus lingers in the world. Until then, it is a threat to the economy and public health as well.
Even though the coronavirus is controlled in many countries, another wave can lead to a major set back. The organization suggests that economic growth can decline by further 2-3 percent in such conditions. The unemployment and financial situation will become even worse in such a condition.
OECD also mentioned that countries with more stringent lockdowns experienced a greater decline in their economic growth. These countries faced a major loss of jobs and income which worsened the economic condition. Also, the lockdown barred people from most activities which led to a shortfall of economic growth.
The regular consumption of households decreased during the lockdown in such countries. Even though there are a few exceptions, most countries with strict rules of lockdown suffered the major downfall.
Since a lot of people lost their jobs, the consumption in an average household decreased greatly. This in turn directly impacted the world economy with a huge decline in growth. The experts suggest that a longer and strict shut down of the business led to this condition.
Coronavirus vaccine is still in the stage of development in the trial so the experts do not expect a worldwide availability of the vaccine. Hence, the countries might get to experience more economic loss in the future depending on the situation of the pandemic.
If the coronavirus resurfaces at a vast level once again, the economy will face an even severe downfall than before. Hence, the experts suggest that maintaining a lesser number of cases is not only important for the economy but also the public healthcare system.