Time to Tackle the Challenges COVID-19 Brought on the Global Economy.
Updated: Apr 5, 2022
Impacts of COVID-19 on the economy
The outbreak of COVID-19 has brought an unprecedented set of challenges on the global economy, especially on the major industries.
One of the most apparent challenges is tourism – travel restrictions set by countries have had a significant impact on tourism.
According to the Mobility Market Outlook on COVID-19, the global revenue for the travel and tourism industry will be an estimated 447.4 billion U.S. dollars in 2020 - a decrease of around 35% from the previous year. Additionally, this is significantly lower than the original 2020 forecast of around 712 billion dollars (S. Lock).
During this time, in order to assure the safety of the citizens, most countries decided to close down businesses and recreational facilities such as restaurants, museums, libraries, amusement parks, etc. Additionally, some countries even started the “shelter in place” policy so that people would stay home in order to maintain social distancing. Lots of tourist-receiving countries in the world have been impacted by this pandemic -- such as Italy. In response to the Covid-19, Italy is expected to experience a decrease of 28.5 million tourist arrivals in the country.
Due to the crisis of COVID-19, many countries have faced serious problems including policy changes, stock market losses, and pauses in trade.
The virus took nearly 130,000 lives in the United States; many people are forced to stay at home,not being able to work.
In Los Angeles, the state has restrictions on traveling. Since then, the county’s economy had dropped significantly “because of restrictions on activities and travel during the COVID-19 pandemic, the region expects to see a drop in visitors of 22 million this year, costing the county economy about $13 billion.” (ABC7). Not just Los Angeles alone, many other states have faced the same problems, service industry and markets are being affected the most in the country.
The US economy has faced serious challenges trying to reopen its market while maintaining public health care. Because the US was not able to reopen its market due to the huge amount of people being infected, the economy plummeted: “the U.S. economy contracted at an annualized rate of 5% in the first quarter and the unemployment rate reached 13% in May” (imf.org). Since the United States shut down businesses in order to combat the virus, many people are losing jobs because their working places were forced to close, and small businesses have a hard time retaining the workers while saving the company.
Although the coronavirus is still active in the states, on June 18, all the states began their own reopening process. Some key policies such as the Paycheck Protection Program and Health Care Enhancement Act were made during the reopening process to help small businesses.
This act was estimated around $483 billion. Other acts such as “Coronavirus Preparedness and Response Supplemental Appropriations Act,” “Families First Coronavirus Response Act,”and “Coronavirus Aid, Relief and Economy Security Act (aka “CARES Act”)” were made to insure the public safety and virus testing.
All these grim statistics present challenges on the companies. Companies around the world are working with this pandemic and looking forward to reopening their companies while ensuring their employees’s softness. As the virus continues spreading and accelerating, let us follow the protocols and be willing to confront all the challenges.