Economic consequences of the COVID-19 pandemic
Economic consequences of the COVID-19 pandemic
COVID-19 has left dramatic rippling effects across the global economy, making a mark on the level of economic activity in every region of the world. In response to the virus, governments across the world have taken strict measures to curtail infection rates, to protect the functioning of healthcare systems and the most vulnerable members of society.
The measures consist of quarantines, and closure of physical shops and businesses, and are essential for abating the spread of the coronavirus. However, the measures have a pronounced immediate impact on the level of economic activity in certain sectors, as they essentially lock down large parts of the economy.
The economic consequences reach far beyond the immediate impact, for example:
Higher unemployment and reduction in wages lower economy-wide demand
Increased uncertainty defers investments from households and businesses
Otherwise healthy companies go bankrupt, reducing production capacity
In this white paper, we analyse these effects and outline different scenarios of how they might evolve.
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