Impact of COVID-19 pandemic on global economy (2024)

Impact of COVID-19 pandemic on industries

The impact of the COVID-19 pandemic is dramatic on the industrial sector as industries require material and manpower for production. In the COVID-19 pandemic, the transmission is human to human. So, the government in many countries enforced strict social distancing and a complete lockdown-like situation that resulted in loss of production days and loss of production. Because of this, many workers who had previously migrated for the work purpose wanted to go back to their native places. This resulted in anxiety among the employees and owners, leading to low production, shutdown and financial crisis.

In the British Plastic Federation survey, about 80% of companies dropped their turnover for the next 6 months. Out of that, 98% of staff expressed concern for the COVID-19 pandemic, while 90% expected the impact of coronavirus on the supply chain, the production rate and the manpower.[10] The chemical industries are facing the worst phase. The global production rate for chemical industries fell by 1.2%.[11] The impact on the industrial sector is huge in terms of economic burden. It will take a couple of years to overcome this situation.

Impact of COVID-19 pandemic on food sector

The food supply chain is involved with manufacturing, packing, distribution and storage of food items. It should be balanced with demand and supply of the consumers.[12] One of the important sectors of day-to-day life is the food sector. Food supply chain should be smooth for the continuous supply of the required items. Food chain includes demand for food items, purchasing patterns and continuous supply. During the COVID-19 pandemic, the flow of food supply was interrupted because of the lockdown, resulting in unessential storage of food items and panic buying from consumers. This led to a food crisis. To overcome these problems, many countries are adopting various techniques. Canadian Food Inspection Agency has made a number of temporary changes to the regulations surrounding labelling and packaging of food.[13,14] Likewise, the distribution of food items should be equitable. Unnecessary storage at the production and distribution level is avoided so that artificial crisis-like situation can be managed and the cost of essential food items can be regulated.

Impact of COVID-19 pandemic on Education sector

COVID-19 had a huge impact on the education sector. Students are bound to be at home to break the transmission of infection. More than 100 countries have closed down the educational institutes. It directly affected 900 million learners all over the world.[15] In low- and middle-income countries, many programmes are going on in the school, like mid-day meal programmes and health surveys which are free of cost. Due to the closure of schools, these programmes lag, resulting in hunger. It had a significant impact on the family income and expenditure.[16]

As per the study by the Brookings Institute, the closure of major schools in US cities because of lockdown. Cost per student allows any regional breakdown of interest. Cost per student per week of closure is $142. Four weeks of lockdown in New York City led to the loss of 1.1 billion of the economy, and 12 weeks cost about 1% of the Gross Domestic Product (GDP). This is a huge economic loss for the country. The lockdown negatively affected students and healthcare workers, costing 3% of GDP.[17] To overcome this problem, online teaching classes have started. But, this is leading to internet addiction among the students. This also increases the expenditure on electronic appliances that may not be affordable to all individuals in this time of economic crisis.[18]

Impact of COVID-19 pandemic on health sector

This pandemic made people aware of the health systems in their country. Every country is trying to make a balance between the infected population and the capacity of hospitals. The existing infrastructure of healthcare sector is already overstretched. The ratio of doctor to patient is highly imbalanced. The diagnostic lab facilities are also inadequate in low- and middle-income countries. The provision of treatment costs in private hospitals is very high and unaffordable for a common person.

At an alarming rate, every country is trying to increase the present infrastructure, resources, medical staff and the equipment to handle the patient's load. Many countries started massive investments in the infrastructure of hospitals and equipment to reduce morbidity and mortality. It accelerated the digital transformation of the health sector. The COVID-19 pandemic disaster taught everyone that there are immense opportunities in the health sectors, and government needs to strengthen them. The economic budget allocation has to increase to deal with the emergencies. There is also a need to focus on the preventive and promotive aspects of the diseases that can reduce the infection and its transmission.

This pandemic altered the preparedness for emergencies and disaster. For this, new programmes and policies are required to deal better with and overcome the situation.[19] In the United States, active pharmaceutical ingredients are imported largely from India (18%) and the EU (26%), while China gives 13%.[20]

Impact of COVID-19 pandemic on tourism

National and international tourism are the most affected sectors due to the COVID-19 pandemic. This situation will continue for a couple of years due to fear of pandemic in the people. International, regional and local travel restrictions immediately affected national economies, including tourism. It led to cancellations of conferences, sports events, festivals and other meetings. The World Travel and Tourism Council estimated that around 90 million jobs in tourism are at risk because of the COVID-19 pandemic.[21] Tourism is the channel through which a huge amount of liquidity flows from one country to another. This is a source of income for many in European countries.[22]

Impact of COVID-19 pandemic on Jobs social protection

Public health is a priority for all governments during this pandemic. Borders are closed in more than 80 countries. Various majors have been taken to control the spread of the infection such as the closure of public platforms, restaurants, transportation, sealing borders of states and countries and closure of schools for more than 1.5 billion children. It significantly declined economic activities, leading to decreased economic output and unemployment. Closure of business for long periods erodes the employee's skills and causes permanent harm to future jobs. Small and medium-sized businesses are the heart of the economy. Closure of business for a long time will cause a slow recovery of the economy.[22,23] On 8 May 2020, the Bureau of Labor Statistics reported that 20 million Americans lost their jobs in April 2020, pushing unemployment to 23 million in America out of 158 civilian labour force. This led to an unemployment rate of 14.7%, higher than the 1930s unemployment depression.[24]

As per the Bureau of Economic Analysis, United States GDP has fallen by 5.0% in the first quarter of 2020. It is a more significant fall in GDP than the 2008 financial crisis. The fall in GDP is a reflection of negative contributions from Personal Consumption Expenditure, private inventory investment, imports, and federal government spending.[24]

The COVID-19 pandemic has hugely affected the European countries. During the COVID-19 pandemic, the European economy contracted by 3.8% annually. It is the most significant economic decline since 1995 (since the series began). The industrial production has decreased across the European countries by 17%. It is estimated that in 2020 there will be an 8–12% decline in the European economy due to the COVID-19 pandemic.[25,26] The ongoing public health problem leads to unemployment and major economic crises. A similar situation is also seen in Asian countries.

The loss of daily wages and unemployment is the leading cause of poor socioeconomic growth. This will push the major population below the poverty line. It is going to change the poverty scenario all over the world.

Financial support and sponsorship

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Conflicts of interest

There are no conflicts of interest.

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