Developed economies such as the UK and the US have been hit particularly hard, with the former contracting by a staggering 19.8% in Q2 alone and experiencing the worst slump of any major economy.
But how are economies looking to balance an effective pandemic response with responsible economic management, and what are the differences in alternative countries across the globe?
Coronavirus has turned into a rampant and seemingly unstoppable pandemic in the States, with this region unique in that it has yet to experience a tangible decline in infection rates and fatalities.
This is arguably due to the lack of a coordinated and organized response at federal level, resulting in more 15.7 million cases and an estimated 293,000 fatalities as of December 11th.
However, there is hope in the form of President elect Joe Biden, who has promised to coordinate a nationwide pandemic response while simultaneously investing in renewed green infrastructure, housing and a more inclusive economy.
Referred to as the “Build Back Better” economic recovery plan, Biden’s ambitious initiative would cost in excess of $7 trillion and potentially create 10 million clean energy jobs as a way of boosting an ailing economy.
Interestingly, Boris Johnson has used a similar slogan to announce his own green industrial revolution, with the Prime Minister having recently set out a 10-point plan that would mobilize £12 billion in public investment and support up to 250,000 British jobs.
However, the impact of the UK’s coronavirus response (including national and tiered lockdown measures) is currently being compounded by Brexit, with the pound continuing to depreciate as the prospect of a no-deal exit begins to impact the GBP in the forex market.
With this in mind, the government is becoming more preoccupied with preserving existing businesses and industries as the end of the year approaches, with the costly furlough having already been extended to the end of March and quarter one in 2021.
The extent of UK borrowing may also delay Boris Johnson’s plans to create a greener economy, with 2021 likely to be one of consolidation, minimal growth and recovery.
We close with Asia, which was the first to feel the socio-economic impact of the virus (particularly during Q1) but has managed to embark on a robust recovery during the second half of 2020.
This growth and positive sentiment are set to extend into 2021, with nominal, positive growth expected to return in the first quarter of next year. No nation embodies this better than China, with this economy now set to grow by 2.1% this year (up from the 1.8% forecast in September) and a further 7.7% next year.
Of course, this recovery has been boosted by the experience garnered by Asian nations during the SARS outbreak at the turn of the century, as individual economies shut down quickly while international borders were also closed with immediate effect.
As a result, confidence and productivity has returned to key sectors such as manufacturing and exports, while the subsequent reopening of international borders in early 2021 will also boost fast-growing Southeast Asian nations.
Here is more on Covid 19 from the California Business Journal archives: