The Impact of the Pandemic on the Global Economy

Abstract

The pandemic has caused huge damage around the world. To date, more than 100 million people have been infected, more than 2 million have died, bringing us to self-isolation and causing a halt to economic activity as countries have imposed strict travel restrictions to halt the spread of the virus. The economic losses caused by the pandemic, the biggest economic shock in decades. The economic losses caused by the COVID-19 pandemic are largely driven by falling demand, meaning that consumers can no longer buy the goods and services available in the global economy. This situation is clearly evident in such affected areas as tourism and the hotel sector. To stop the spread of the virus, countries have imposed travel restrictions, which means that many cannot purchase tickets for holidays or business meetings. Such a reduction in consumer demand leads to the loss of planned revenue for airlines, they have to reduce the cost of flights, reduce the number of expenses. Without government support, the airline will eventually have to cut staff to cut costs, too. Despite the difficult situation in which the world economy finds itself, there are reasons to avoid the worst-case scenario. From past crises, governments have come to the conclusion that a recession caused by falling demand can be overcome by public spending. Accordingly, the authorities of many countries are increasing the assistance of their citizens and the availability of enterprises to cash, which is necessary for the maintenance of personnel during the pandemic. In addition, as practice shows, some industries benefit even in the face of a pandemic, for example, online retail sales, whose profit in 2020 was $ 3.9 trillion, as well as retail sales of food, government and medical industries have some economic growth that provides compensation for losses. Keywords: Pandemic, COVID-19, World Economy, Globalization, Crisis.