COVID-19 recession

COVID-19 recession
Map showing real GDP growth rates in 2020, recorded by the International Monetary Fund as of 26 January 2021; countries in brown are those that have faced a recession.
Date20 February 2020
TypeGlobal recession
Cause
Outcome

The COVID-19 recession, also known as the Great Lockdown, was a global economic recession caused by the COVID-19 pandemic. The recession began in most countries in February 2020. After a year of global economic slowdown that saw stagnation of economic growth and consumer activity, the COVID-19 lockdowns and other precautions taken in early 2020 drove the global economy into crisis.[1][2][3][4] Within seven months, every advanced economy had fallen to recession.[5][6]

The first major sign of recession was the 2020 stock market crash, which saw major indices drop 20 to 30% in late February and March. Recovery began in early April 2020; by April 2022, the GDP for most major economies had either returned to or exceeded pre-pandemic levels[7] and many market indices recovered or even set new records by late 2020.[8][9][10]

The recession saw unusually high and rapid increases in unemployment in many countries. By October 2020, more than 10 million unemployment cases had been filed in the United States,[11] swamping state-funded unemployment insurance computer systems and processes.[12][13] The United Nations (UN) predicted in April 2020 that global unemployment would wipe out 6.7% of working hours globally in the second quarter of 2020—equivalent to 195 million full-time workers.[14] In some countries, unemployment was expected to be around 10%, with more severely affected nations from the pandemic having higher unemployment rates.[15][16][17] Developing countries were also affected by a drop in remittances[18] and exacerbating COVID-19 pandemic-related famines.[19]

The recession and the accompanying 2020 Russia–Saudi Arabia oil price war led to a drop in oil prices; the collapse of tourism, the hospitality industry, and the energy industry; and a downturn in consumer activity in comparison to the previous decade.[20][21][22] The 2021–2023 global energy crisis was driven by a global surge in demand as the world exited the early recession caused by the pandemic, particularly due to strong energy demand in Asia.[23][24][25] This was then further exacerbated by the reaction to escalations of the Russo-Ukrainian War, culminating in the Russian invasion of Ukraine and the 2022 Russian debt default.[26]

  1. ^ Juliana Kaplan; Lauren Frias; Morgan McFall-Johnsen (14 March 2020). "A third of the global population is on coronavirus lockdown – here's our constantly updated list of countries and restrictions". Business Insider Australia. Retrieved 15 April 2020.
  2. ^ The return of Keynesianism? Exploring path dependency and ideational change in post-covid fiscal policy. Policy & Society. Volume 41, Issue 1, January 2022, Pages 68–82
  3. ^ Elliott, Larry (8 October 2019). "Nations must unite to halt global economic slowdown, says new IMF head". The Guardian. ISSN 0261-3077. Retrieved 15 April 2020.
  4. ^ Cox, Jeff (21 November 2019). "The worst of the global economic slowdown may be in the past, Goldman says". CNBC. Retrieved 15 April 2020.
  5. ^ Zumbrun, Josh (10 May 2020). "Coronavirus Slump Is Worst Since Great Depression. Will It Be as Painful?". The Wall Street Journal. ISSN 0099-9660. Retrieved 20 January 2021.
  6. ^ "World Economic Outlook, April 2020: The Great Lockdown". IMF. Retrieved 15 April 2020.
  7. ^
  8. ^ "World Economic Outlook Update, June 2020: A Crisis Like No Other, An Uncertain Recovery". IMF. Retrieved 11 September 2020.
  9. ^ "The Great Lockdown: Worst Economic Downturn Since the Great Depression". IMF Blog. 14 April 2020. Retrieved 16 April 2020.
  10. ^ "COVID-19 to Plunge Global Economy into Worst Recession since World War II". World Bank. Retrieved 11 September 2020.
  11. ^ "Unemployment cases jump in the United States". CNBC. 15 October 2020.
  12. ^ Aratani, Lauren (15 April 2020). "'Designed for us to fail': Floridians upset as unemployment system melts down". The Guardian. ISSN 0261-3077. Retrieved 15 April 2020.
  13. ^ "The coronavirus has destroyed the job market. See which states have been hit the hardest". NBC News. Retrieved 15 April 2020.
  14. ^ "ILO: COVID-19 causes devastating losses in working hours and employment". 7 April 2020. Retrieved 19 April 2020.
  15. ^ Partington, Richard (14 April 2020). "UK economy could shrink by 35% with 2m job losses, warns OBR". The Guardian. ISSN 0261-3077. Retrieved 15 April 2020.
  16. ^ Sullivan, Kath (13 April 2020). "Unemployment forecast to soar to highest rate in almost 30 years". ABC News. Retrieved 15 April 2020.
  17. ^ Amaro, Silvia (15 April 2020). "Spain's jobless rate is set to surge much more than in countries like Italy". CNBC. Retrieved 15 April 2020.
  18. ^ "Covid stops many migrants sending money home". The Economist. ISSN 0013-0613. Retrieved 23 April 2020.
  19. ^ Picheta, Rob (22 April 2020). "Coronavirus pandemic will cause global famines of 'biblical proportions,' UN warns". CNN. Retrieved 13 July 2020.
  20. ^ Yergin, Daniel (7 April 2020). "The Oil Collapse". Foreign Affairs: An American Quarterly Review. ISSN 0015-7120. Retrieved 15 April 2020.
  21. ^ Dan, Avi. "Consumer Attitudes And Behavior Will Change in the Recession, And Persist When It Ends". Forbes. Retrieved 15 April 2020.
  22. ^ "The $1.5 Trillion Global Tourism Industry Faces $450 Billion Collapse in Revenues, Based on Optimistic Assumptions". Wolf Street. 30 March 2020. Retrieved 15 April 2020.
  23. ^ "Energy crunch: How high will oil prices climb?". Al-Jazeera. 27 September 2021.
  24. ^ "Covid is at the center of world's energy crunch, but a cascade of problems is fueling it". NBC News. 8 October 2021.
  25. ^ "Energy Crisis 2021: How Bad Is It, And How Long Will It Last?". Forbes. 19 October 2021.
  26. ^ "Biggest stock slide on Wall Street since '20 as oil surges". AP News (STAN CHOE and ALEX VEIGA). 7 March 2022.

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