Here Are the Major Economic Events of the COVID-19 Crisis So Far
Since its recognition in December of 2019, the COVID-19 pandemic has taken a toll on nearly every nation on the planet. The global pandemic has managed to infiltrate and disrupt the lives of many people, the toll on the healthcare system, and the health of global economies around the world.
Every single day, dozens of news articles document the drastic economic changes that countries are experiencing during these uncertain times. In the midst of all of the depressions and the recessions, three major turning points can be considered: the initial recession, the gradual climb, and the rocky fight for recovery.
The Recession
When the pandemic was first identified, countries all over the world opted to close down almost everything but essential operations to limit the spread of the virus. And while this may have been a good preventative measure from a medical standpoint, it did not come without a massive economic collapse.
On its onset, economists all over the world were hoping for a V-Shaped recovery: a gradual collapse, and a swift climb back to the status quo. The USA went through their own V-Shaped recovery in 1990. They experienced a plummet, but went back to their normal economic stability in a considerable amount of time. When compared to other types of economic recoveries, the V-Shaped recovery is the most desirable for it’s quick recovery time.
The economic plunge lasted from the time things began to shut down, all the way until the end of the first wave. This lasted from around February to May of 2020.
The graph below showcases the drop in selective sector’s of Canada’s economy at the start of the recession, and at its end. The drastic changes from February to March are visual depictions of just how drastic the economic recession was, especially for Canada.
Around the world, economies took a plummet in a similar fashion. Closing so many businesses, and putting so many people out of work had a crippling effect on the economy. In the early months of the virus, many economic journals published graphs of what they expected might come of the virus from an economic recovery standpoint. All of them predicted dramatically different outcomes. The uncertainty that came with the virus loomed upon the predictions of many, which leads into the next major turning event.
The Climb
After the initial period of quarantine was over, countries around the world slowly began re-opening for business. Many businesses had adapted to e-commerce, and continued to operate with strict restrictions and regulations. However, regardless of whether or not people were truly ready to leave the quarantine period, the economy was slowly inching its way back up.
In Canada, the Canadian government took several steps to protect the economy by pumping funding into it directly. This came to be known as the birth of Bill 197 and the Economic Recovery Act.
Bill 197 covered a great deal of economic regulations that Canada would adopt; a great deal of these directly impacted businesses, and opted to protect them during harsh financial times to prevent another economic recession. For example, consider the “Modernizing Ontario for People and Business Act,” also known as MOPBA. MOPBA’s goal is to optimize and provide for an offset in administrative costs that relate to compliance of regulations that have been set in place.
The Economic Response Plan provided support for almost all sectors of the Canadian economy. These included individuals, businesses, organizations, provinces, territories, and other sectors. Each section outlined its own programs, benefits, and infrastructure agendas. For example, for many businesses, the Canadian government has offered numerous proposed solutions in order to do things such as mitigate layoffs, create new jobs, offer financial support, targeted support for entrepreneur minorities, and more.
While these measures helped to aid in the regrowth of the economy, they did not provide a sustainable recovery measure for the future. The growth back to a status quo has lasted from May to late August of 2020.
That’s where we are today, which leads into the final major turning point of the COVID-19 financial crisis.
The (Rocky) Recovery
Both the recession and the climb back up to a recovery were difficult for global economies to adapt to. Around the world, constant rocky graphs can be seen outlining the highs and the lows of the fight for equilibrium.
Today, we are barely in the recovery phase of the COVID crisis. With cases on the rise as a result of the second wave, all that we can expect is a gradual recovery. However, it is still somewhat unclear of what kind of recovery we can expect from the pandemic. With uncertainty on the rise, nobody knows what the future of the financial crisis may hold.
The Conference Board held an international poll of 500 CEOs, asking them what they thought could be expected of the COVID pandemic recovery. Most believe that we will experience something called an L-Shaped recovery; this is characterized by a sharp economic decline, followed by a gradual and steady growth. It is not as desirable as a V-Shaped recovery due to it’s extended stagnation, but it isn’t the slowest type of recovery that we can expect. It can be seen on an economic graph outlining the total gross domestic product of a country over a period of time. Below is a graph that represents the results of the poll conducted.
No matter what kind of recovery we can expect, one thing is clear; it will take a very long time in order for not only the economy to recover, but for the world to recover as a whole.
To return to pre-pandemic levels will be a difficult process, but one that will happen eventually. The news changes almost every day, providing us with insights on the second wave of the pandemic, and what we can expect in the next couple of months.
What we can do now is continue to monitor the news, stay safe, and be alert about what is happening in the world. Keeping up with the latest updates on the situation will help us better understand what we can expect in the future.
