The COVID-19 pandemic is an unprecedented worldwide phenomenon and a deeply personal experience with far-reaching consequences. On September 20, 2021, viral fatalities in the United States exceeded the 675,446 total from the 1918 Spanish flu, the previous greatest pandemic-related fatality total in the United States. The epidemic has disrupted life in all nations and communities and negatively impacted global economic development in 2020 that is unprecedented in over a century. According to estimates, the virus lowered global economic growth in 2020 to an annualized rate of roughly -3.2 percent, with a 5.9 percent rebound in 2021. Global trade was estimated to have fallen by 5.3% in 2020 but was projected to grow by 8.0% in 2021. According to mainstream projections, the economic slump in 2021 was less severe than previously anticipated, thanks to fiscal and monetary policies implemented by governments in 2021.
Economic growth in most nations decreased drastically in the second quarter of 2020, swiftly recovered in the third quarter, and has mainly been positive thereafter. Although the overall global economic consequences are reducing, they are still significant. The chronic nature of the health crisis, in particular, is hurting the global economy in ways that go beyond standard metrics, with potentially long-term and far-reaching consequences. Economic estimates reflect the continued dangers to a long-term global recovery presented by a comeback of contagious diseases, as well as possible inflationary pressures associated with pent-up consumer demand powered by an increase in human savings. On the supplier side, shortages reflect ongoing labour market disturbances, manufacturing and supply network bottlenecks, disturbances in global energy markets, and transportation and logistics impediments, all of which contribute to rising inflation.
In contrast to the synchronized nature of the global economic slowdown in the first half of 2020, the global economy has shown signs of a two-track recovery, which began in the third quarter of 2020 and has been marked by a nascent recovery in developed economies with high vaccination rates, but a slower rate of growth in developing economies with low vaccination rates. As several developed economies begin to recover, financial institutions and government bodies are balancing the impact and timing of withdrawing monetary and fiscal support due to worries about possible inflationary pressures versus the risk of delaying the speed of recovery. These worries are exacerbated by the advent of novel disease types and rolling epidemic hotspots, which pose a challenge to national attempts to limit infections and completely restore economic activity. Major developed economies, which account for 60% of the world economy, are expected to function below their potential production level until at least 2024, implying reduced individual and national economic wellbeing compared to pre-pandemic levels.
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