How Coronavirus continues to affect the global economy

(Credit: Unsplash)

At its core, the coronavirus pandemic remains a distinctly human tragedy. This is borne out by the number, with more than 52 million cases and nearly 1.3 million fatalities recorded as of November 12th. 

However, this shouldn’t distract from the fact that the Covid-19 outbreak has also had a huge socio-economic impact across the globe, particularly with a second wave of infections breaking out and various lockdown and quantitative easing measures continuing to impact on national economies.

In this post, we’ll explore this impact in further detail, while casting our eyes over the UK and Europe in particular.

The Rise and Rise of Covid-19 in the US (and Beyond)

In many ways, the coronavirus pandemic appears to be most out of control in the US, with record-breaking case numbers being reported against the backdrop of the disputed, controversial and yet-to-be-confirmed election of Democratic candidate Joe Biden.

Barely one day after media outlets nationwide called the US election in favour of Biden (although Trump has yet to concede and is protesting some results at state level), the US recorded more than 100,000 new coronavirus cases in a single day for the very first time since the pandemic began.

During this 24-hour period, the total number of new infections peaked at 107,800, at least according to a detailed New York Times database.

Overall, 23 states have recorded more cases during the previous week than in any other seven-day stretch, while five (namely Maine, Minnesota, Indiana, Nebraska and Colorado) set single day case records in this brief period.

Not only have these regional and widespread outbreaks triggered widespread unemployment, but they’ve also caused job creation levels to stagnate across the board.

More specifically, job openings inched slightly higher on a monthly basis by 84,000 to 6.4 million on the final day in September, while the total number of vacancies stateside remained well below their seven million level back in February (before the coronavirus took hold in March and was confirmed as a global pandemic).

What About the Impact in Europe?

A similar trend is prevalent in the UK and Europe, with the former currently trapped in a four week lockdown that’s projected to end in the first week of December.

This is causing several economists to warn that the UK economy is poised for a sharp contraction in Q4, particularly given a marked slowdown in September and the impact of the national lockdown measures that have recently been imposed.

This followed GDP growth of 15.5% during Q3 in the UK, as the first lockdown measures were culled and the economy returned to something like its normal self. However, this already left the UK economy approximately 9.7% smaller than the start of the year, with a further contraction likely to push this shortfall into double figures before the end of 2020.

The pound has also suffered on the back of stimulus and quantitative easing measures, which have slashed the base interest rate and reduced capital inflows from overseas.

With similar lockdowns currently in place in France and Germany, a similar fourth quarter contraction is scheduled for the Eurozone.

The Italian government also announced on Wednesday night that it would lock down a significant portion of its country, including the northern regions that continue to serve as key economic engines.

This makes the scenario particularly critical for Italy, which was one of the hardest-hit countries earlier in the year (both from the perspective of economic output and casualties).