Problemi Ekonomiki (Mar 2020)
The Impact of COVID-19 on the World’s Economies
Abstract
The aim of the article is to study the degree of and trends in the impact of COVID-19 on the economic situation in the world and determine the socio-economic losses that Ukraine will suffer from the pandemic of this disease. In the course of the study, the impact of the coronavirus pandemic on the trends in the development of the global economy is examined. The main consequences of COVID-19 for the global economy that have already manifested themselves are: a fall in exchange indices; a significant decrease in oil prices and a slowdown in the development of the metal market; a reduction in production volumes; a significant decrease in revenue of airlines and maritime transport, shopping and entertainment centers, the tourism industry; a decrease in the population’s incomes; a growth in revenues of the pharmaceutical industry and the global industry of gaming, educational and other online applications; an increased investor demand for less risky assets. In this situation, the growth rate of the world economy is already decreasing (from 2.5 % to 0.6 %). In 2020, at the global level, the economic situation will be close to a recession, the losses of the world economy can reach USD2.7 trillion. For the Ukrainian economy, the crisis caused by the spread of COVID-19 is especially dangerous and can significantly shake the country’s financial and economic status: official employment and real GDP will fall, the corporate sector will suffer significant losses, the chances for a successful placement of Eurobonds will decrease, foreign investment inflow will decrease, and the national currency will become cheaper. Under the optimistic scenario, in 2020, the decline in Ukraine’s economy due to the spread of COVID-19 will amount to 4–5 % of GDP; under a worst-case scenario, 9–10 %. All of the above indicates the need for making informed decisions by the governments of the world and local authorities, which, in close cooperation with leading experts, the corporate sector and the population, should pursue an effective socio-economic policy both during the quarantine and within the next months after its completion. The prospects for further research are to analyze the economic consequences of the quarantine, the losses of the world economy after overcoming coronavirus disease, and real measures that have been taken to stabilize the financial and economic situation at the micro and macro levels.
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