Coronavirus played the role of a catalyst for negative processes in the global economy. It accelerates the destruction of services and the decline in production. Although the crisis has already been compared in its consequences to the Great Depression of the 1930s, experts have yet to assess the true extent of the impact of the pandemic on the economy.
Even before the spread of coronavirus, economists spoke of an approaching crisis. The recession was supposed to complete the next cycle of growth and contraction of the economy. The advent of corvid 19 became the “black swan”, the arrival of which collapsed the stock markets, depreciated oil and accelerated the growth of unemployment.
The first and most tangible consequence of the pandemic was the reduction in production of a wide range of goods. The shortage of various components, equipment and other goods from China became noticeable after the Chinese economy stopped. Around the same time, a gradual decline in oil prices began, associated with a decrease in demand. At this time, it was not yet known whether the coronavirus would break out of the PRC, so only a slowdown in global GDP was projected.
After the outbreak of infection in the EU and the United States, it became clear that a global catastrophe awaits. Coronavirus literally paralyzed the service sector, which in developed countries sometimes exceeds 50% of GDP. With few exceptions, consumers simply abandoned everything that was not related to providing basic needs and psychological comfort.
Favorable conditions for development received only a few sectors:
- Pharmaceuticals and medical equipment.
- Communications and virtual technology.
- The industry of online entertainment.
What to expect in the future?
Some industries will recover over the years, and some may not be able to reach pre-crisis levels. Disappointing forecasts sound about the oil and gas market. Growing energy needs in the future will be met by alternative sources.
The stock price of most companies rapidly crawled down. During the crisis, some investors began selling assets in order to enter the fiat currency. Pessimistic sentiment strengthens the widespread belief that the world will no longer be the same.
It will be possible to assess all the consequences in full only after restarting the US and EU economies. Unfortunately, no one can name exact dates today. Apparently corvid 19 with us for a long time.