How The Economy Will Recover After Covid 19

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The use of electronic commerce accelerated during the pandemic, and technologies such as automation and artificial intelligence change the nature of work and the international economy. According to Oxford Economics, the global economy is projected to grow this year by 6%, the fastest rate in a century as vaccine campaigns allow the lifting of pandemic restrictions and companies pull out. 

A year and a half after the outbreak of COVID-19 pandemic, the global economy faces its most robust recovery post-recession in 80 years in 2021. But the recovery is expected to be uneven, with some countries and large economies experiencing strong growth, while many developing countries will lag behind. As the pandemic continues to flare up, it is shaping the path of global economic activity. 

Owing to the strength of large economies such as China and the United States, global growth is predicted to increase this year to 5.6%. But, owing to the unequal impact of the pandemic, the pace of economic recovery will vary widely between countries. By 2020, the global economy will have shrunk by 4.3%, with some countries faring worse than others. 

The introduction of the COVID-19 pandemic shook the global economy and caused one of the most abrupt production declines on record. The British economy suffered its worst recession in 300 years, shrinking by 10%. The US economic recovery had already taken a break by the end of 2020, and the third wave of the coronavirus pandemic caused another pause. 

Combined with classical economic models such as the SIRS-like epidemic model, it is assumed that the global economy is subject to the dynamics of the COVID-19 pandemic, partly due to traditional economic models (2). Analytical support for a rapid U-shaped recovery (3) has been prolonged by the L-shaped crisis and the stagnation trapped by poor economic forecasts, resulting in lower consumption and lower investment (4). Consideration was also given to the possibility that the crisis could be a permanent loss of production. 

The strength of COVID-19 "s projected economic recovery varies from country to country. The faster recovery in advanced countries is due to their expansionary policy support and rapid access to vaccines compared to many developing countries. 

With the coronavirus still rampant in many countries, a key question is whether the emergence of a new strain virulent will trigger a repeat of the stop-and-go cycle that we have seen in the reopening of economies in some cases. One ominous possibility is that more vaccine-resistant variants will emerge, increasing the urgency of immunization efforts, which have already slowed in many regions. Oil exporters and tourist economies also will face difficult prospects given the soft outlook for oil prices and the expected slow normalisation of cross-border travel. 

Moodys Investors Service expects US economic activity as a percentage of GDP to return to pre-coronavirus path by the end of 2021, but higher unemployment rates and a delayed recovery in some hard-hit sectors could leave visible wounds. As COVID-19 Vaccination increases and pandemic disruption fades, several factors point to a recovery of GDP to pre-Covid-19 path by the end of the year. Given these uncertainties, the recovery appears to be stronger in the US than in China, emerging Asia, and parts of China's global supply chain. But it could be slower and less robust, leaving permanent scars on many bankrupt companies and labor markets that are starting to show the hysteresis (long-term unemployment) that makes workers unemployed because of the erosion of skills. 

The strength of the projected recovery will vary from country to country, with large differences in projected output losses compared to the forecasts before Covid. China, despite being the largest economy, will return to pre-pandemic levels in the fourth quarter of 2020. 

According to a recent report by the OECD and the World Economic Forum, the global outlook appears to be improving more than a year after the pandemic broke out. The report shows that countries such as Japan, South Korea, Japan and Germany are on track to recover to the pre-pandemic levels by the end of 2021. The United States, like the euro area, is forecast to exceed its pre-COVID level this year. 

Others, such as Iceland and Spain, have suffered hugely from a fall in tourism revenues and are expected to remain under pre-pandemic levels until at least mid-2023. Worse, some countries, such as South Africa and Argentina, are projected to remain below their 2019 levels until 2024 and 2025, respectively. 

The next stage of a strong recovery depends on the third group of sectors, as the recovery potential of this group is more exhausted than that of the first sector and may never fall below that. While some sectors have recovered from the blockade, others remain unable to recover from pre-crisis levels due to the risk of exposure to virus. 

At the start of the pandemic, when few understood what life would be like when life returned to normal, many analysts spoke of a V-shaped recovery. In response to the pandemics, there was an opening, followed by an increase in COVID-19 cases, and then another round of closures in the autumn, with a W-shaped recovery. 

The key question is how long the damage to economies "ability to produce goods and services will last. With the reopening of the economy, measures will be taken to limit economic activity to a certain extent: travel will become less frequent, business premises will be without workers and customers, restaurants will temporarily serve fewer customers, and sporting events, concerts and other activities with large crowds will remain taboo for a long time. These measures will allow many people who were reluctant to return to life before the pandemic to do so.