Economic Effects of Covid-19

X L R 8 COMPANIES ECONOMIC EFFECTS OF COVID-19 HOW THE WORLDS 15 LARGEST ECONOMIES CHANGED AFTER COMING INTO CONTACT WITH A GLOBAL PANDEMIC 757 3RD A V E N U E , 2 0 TH FLOOR NEW YORK, NY 10016 PUBLISHED: JUNE 15, 2020 TABLE OF CONTENTS EXECUTIVE SUMMARY 4 INTRODUCTION 5 METHODOLOGY 5 CASE STUDIES 6 United States Of America 6 Economic Background 6 Response 8 Current / Post Pandemic Functionality 14 China 14 Economic Background 14 Response 16 Current / Post Pandemic Functionality 19 Japan 19 Economic Background 19 Response 21 Current / Post Pandemic Functionality 27 Germany 27 Economic Background 27 Response 28 Current / Post Pandemic Functionality 31 India 31 Economic Background 31 Response 32 Current / Post Pandemic Functionality 36 United Kingdom 36 Economic Background 36 Response 37 Current / Post Pandemic Functionality 46 France 46 Economic Background 46 Response 47 Current / Post Pandemic Functionality 50 Brazil 50 Economic Background 50 Response 51 2 Current / Post Pandemic Functionality 61 Italy 62 Economic Background 62 Response 62 Current / Post Pandemic Functionality 66 Canada 66 Economic Background 66 Response 67 Current / Post Pandemic Functionality 89 Russia 90 Economic Background 90 Response 90 Current / Post Pandemic Functionality 93 South Korea 93 Economic Background 93 Response 94 Current / Post Pandemic Functionality 95 Australia 95 Economic Background 95 Response 96 Current / Post Pandemic Functionality 99 Spain 99 Economic Background 99 Response 100 Current / Post Pandemic Functionality 108 Mexico 109 Economic Background 109 Response 109 Current / Post Pandemic Functionality 111 GLOBAL ANALYSIS OF COVID-19 EFFECTS 112 REFERENCES 117 3 EXECUTIVE SUMMARY The COVID-19 pandemic has spread with alarming speed, infecting millions, and bringing economic activity to a near-standstill as countries imposed tight restrictions on movement to halt the spread of the virus. As the health and human toll grows, the economic damage is already evident and represents the largest economic shock the world has experienced in decades. The baseline forecast envisions a 5.2 percent contraction in global GDP in 2020, using market exchange rate weights—the deepest global recession in decades, despite the extraordinary efforts of governments to counter the downturn with fiscal and monetary policy support. The crisis highlights the need for urgent action to cushion the pandemic’s health and economic consequences, protect vulnerable populations, and set the stage for a lasting recovery. For emerging market and developing countries, many of which face daunting vulnerabilities, it is critical to strengthen public health systems, address the challenges posed by informality, and implement reforms that will support strong and sustainable growth once the health crisis abates. The pandemic is expected to plunge most countries into recession in 2020, with per capita income contracting in the largest fraction of countries globally since 1870. Advanced economies are projected to shrink 7 percent. That weakness will spill over to the outlook for emerging market and developing economies, who are forecast to contract by 2.5 percent as they cope with their own domestic outbreaks of the virus. This would represent the weakest showing by this group of economies in at least sixty years. Every region is subject to substantial growth downgrades. East Asia and the Pacific will grow by a scant 0.5%. South Asia will contract by 2.7%, Sub-Saharan Africa by 2.8%, Middle East and North Africa by 4.2%, Europe and Central Asia by 4.7%, and Latin America by 7.2%. Emerging market and developing economies will be buffeted by economic headwinds from multiple quarters: pressure on weak health care systems, loss of trade and tourism, dwindling remittances, subdued capital flows, and tight financial conditions amid mounting debt. The pandemic and efforts to contain it have triggered an unprecedented collapse in oil demand and a crash in oil prices. While agriculture markets are well supplied globally, trade restrictions and supply chain disruptions could yet raise food security issues in some places. 4 INTRODUCTION Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus. Most people infected with the COVID-19 virus will experience mild to moderate respiratory illness and recover without requiring special treatment. Older people, and those with underlying medical problems like cardiovascular disease, diabetes, chronic respiratory disease, and cancer are more likely to develop serious illness. (Organization 2020) COVID-19 is currently considered a global pandemic and has passed 7,127,753 resulting in 407,159 deaths in over 2016 countries and territories. (Organization 2020) It has caused contractions in economies throughout the world as well as through the global economy. This report delves into review of the effects of COVID-19 in the worlds fifteen largest economies in order to better understand the widespread effects of the virus medically and economically. Each case study covers how the country functioned before, during, and potentially after the virus past its peak within the country. This report focuses on governmental response, outside of citizen response. It’s important to note that this report was not written to sway or determine action for business or financial activity. However, the reports usage to determine business or financial action in a current / post pandemic world is strictly up to the reader. Xelerate Companies takes no responsibility for financial gains or losses with the report published. METHODOLOGY Before delving into the report and each case study, it’s important to review methodology for how the report was created. Information for the report was drawn through released data and statistics from intergovernmental, supranational, and governmental organizations. Statistical Data will be last updated from the last draft of the report, in order to show the latest statistics and relevant information. Case study information for overviews were drawn from the CIA World Factbook, a reputed nonpartisan source simply stating general background information from the country. Case study overviews are only focused on economic background, and although political issues may be referenced, they are not explained in the report. In order to measure responses, government reports were mainly used, with information also being drawn from condensed news articles. In case of publishing or public use, this report has been accurately cited and referenced under the Chicago Manual of Style, 17th Edition. 5 CASE STUDIES United States Of America Economic Background The US has the most technologically powerful economy in the world, with a per capita GDP of $59,500. US firms are at or near the forefront in technological advances, especially in computers, pharmaceuticals, and medical, aerospace, and military equipment; however, their advantage has narrowed since the end of World War II. Based on a comparison of GDP measured at purchasing power parity conversion rates, the US economy in 2014, having stood as the largest in the world for more than a century, slipped into second place behind China, which has more than tripled the US growth rate for each year of the past four decades. In the US, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, businesses face higher barriers to enter their rivals' home markets than foreign firms face entering US markets. Long-term problems for the US include stagnation of wages for lower-income families, inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, energy shortages, and sizable current account and budget deficits. The onrush of technology has been a driving factor in the gradual development of a "two- tier" labor market in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. But the globalization of trade, and especially the rise of low-wage producers such as China, has put additional downward pressure on wages and upward pressure on the return to capital. Since 1975, practically all the gains in household income have gone to the top 20% of households. Since 1996, dividends and capital gains have grown faster than wages or any other category of after-tax income. 6 Imported oil accounts for more than 50% of US consumption and oil has a major impact on the overall health of the economy. Crude oil prices doubled between 2001 and 2006, the year home prices peaked; higher gasoline prices ate into consumers' budgets and many individuals fell behind in their mortgage payments. Oil prices climbed another 50% between 2006 and 2008, and bank foreclosures more than doubled in the same period. Besides dampening the housing market, soaring oil prices caused a drop in the value of the dollar and a deterioration in the US merchandise trade deficit, which peaked at $840 billion in 2008. Because the US economy is energy-intensive, falling oil prices since 2013 have alleviated many of the problems the earlier increases had created. The sub-prime mortgage crisis, falling

Load more