Tuesday February 23, 2021 - 10:02:58 GMT
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The Financial Impact Of COVID-19
The COVID-19 pandemic has progressed across the world and touched almost every country, disturbing the world’s economy as a whole, as well as personal finance and household income. With a rise in unemployment, the introduction of the furlough scheme, and disruption to the transportation and manufacturing industries, the pandemic is much more than just a public health crisis – it is also a global economy crisis.
While the situation is ongoing and developing every day, here is a brief look at the financial impact of COVID-19 across the globe so far.
COVID-19 Classed As A Pandemic
The World Health Organization identified and classed COVID-19 as a pandemic on 11th March 2020. By this point, a considerable amount of damage had already wreaked havoc on the economy of multiple countries because of business closures, reduced productivity, and trade disruption. However, the financial impact did not stop there. There was also a huge stock market crash, which triggered a circuit breaker for the first time since the financial crisis of 2007-08, there was a collapse in demand for oil and oil products, and a decline in bond prices too. There were no industries that were not affected in some way by the growing pandemic and unfortunately, the global economy suffered a big hit. Ultimately, the coronavirus pandemic was quickly causing the largest global recession in history, which is still being felt to this day.
Rising Levels Of Unemployment
The workplace became somewhere that was unsafe to be, so the furlough scheme was introduced, which saw many workers lose a portion of their salaries each month, while some people were made redundant. The numbers of job opportunities are still very low in some countries, including the UK and France, and it is thought that it could take years for employment levels to return to those seen before the pandemic hit, but for some countries, job vacancies are steadily on the rise.
Personal Finances & The Shift To Online Shopping
In many countries, political leaders chose to impose lockdowns, which were unprecedented, but a necessary step to help slow the spread of the coronavirus. This meant that at one point during the pandemic, more than a third of the global population was in lockdown at the same time, and because of this, combined with business closures, individuals took to the web to shop. As businesses were closing their physical outlets and making the move to ecommerce, the world turned to their phones and laptops to make their essential and non-essential purchases.
The time in lockdown also allowed people to reassess their personal finances and learn about budgeting, but also a boom in individuals buying from new small businesses that were established because of the free time that lockdown allowed people to have. However, the global lockdowns also came with an influx of redundancies as businesses reduced their amount of staff expenditure, seeing a rise in loan applications, including bad credit loans to help those in particularly poor financial situations.
Overall, it is estimated that the global economy is currently in a decline that is the worst since the Great Depression in the 1930s, but the world is slowly starting to recover with some countries seeing incline, thanks to the vaccination programme and the restrictions imposed during the height of the pandemic.
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