Economic Effects of Coronavirus Outbreak (COVID-19) on the World Economy

By Nuno Fernandes. Social Science Research Network, 2020

1,648 citations recorded by the source corpus.

This report discusses the economic impact of the Coronavirus/COVID-19 crisis across industries, and countries. It also provides estimates of the potential global economic costs of COVID-19, and the GDP growth of different countries. The current draft includes estimates for 30 countries, under different scenarios. The report shows the economic effects of outbreak are currently being underestimated, due to over-reliance on historical comparisons with SARS, or the 2008/2009 financial crisis. At the date of this report, the duration of the lockdown, as well as how the recovery will take place is still unknown. That is why several scenarios are used. In a mild scenario, GDP growth would take a hit, ranging from 3-6% depending on the country. As a result, in the sample of 30 countries covered, we would see a median decline in GDP in 2020 of -2.8%. In other scenarios, GDP can fall more than 10%, and in some countries, more than 15%. Service-oriented economies will be particularly negatively affected, and have more jobs at risk. Countries like Greece, Portugal, and Spain that are more reliant on tourism (more than 15% of GDP) will be more affected by this crisis. This current crisis is generating spillover effects throughout supply chains. Therefore, countries highly dependent on foreign trade are more negatively affected. The results suggest that on average, each additional month of crisis costs 2.5-3% of global GDP.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/9560914197d767cbcf418e305db98e10d7a5b72d

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Citations in the corpus

Does the size of the tourism sector influence the economic policy response to the COVID-19 pandemic? (2021, background): “…countries such as Greece, Portugal, Mexico or Spain, for which tourism constitutes more than 15% of GDP, in the baseline scenario the crisis is expected to cost between 5.2 and 6.2% of their GDP, above the average of 4.5% of GDP estimated for the sample of 30 analyzed countries (Fernandes, 2020).”
Risk Perceptions and Psychological Effects During the Italian COVID-19 Emergency (2020, background): “…psychological strain (Mazza et al., 2020), traumatic impact from protracted social isolation and distance, shocking working aftermaths in terms of job loss and job search (Crayne, 2020), unemployment crisis (Blustein et al., 2020), economic crash across industries and countries (Fernandes, 2020).”
The Effectiveness of Russian Government Policy to Support SMEs in the COVID-19 Pandemic (2020, neutral): “…countries, such as tax holidays [25,48,54,57,58]; moratorium on conducting business audits [58,59]; insurance premium reduction and holidays [58,59]; credit holidays [54,58–63]; moratorium on bankruptcy filings initiated by creditors [58,59]; public funding [54,55,58,59,62,64–66] and so on.”
Impact of COVID-19 pandemic on information management research and practice: Transforming education, work and life (2020, background): “Studies are already assessing the potential of COVID-19 to permanently normalise the use of digital technologies for education, maintaining friendships, healthcare diagnosis, business operations, religion and interaction with government, effectively shaping human endeavour for the foreseeable future”
Longitudinal changes in mental health and the COVID-19 pandemic: evidence from the UK Household Longitudinal Study (2020, background): “The social distancing restrictions, for example, may have increased social isolation (Armitage & Nellums, 2020) and the widespread reports of the economic downturn may have caused concerns about financial insecurity (Fernandes, 2020).”
Socio-Economic Impacts of COVID-19 on Household Consumption and Poverty (2020, background): “The U.S. economy, where gross domestic product (GDP) fell by 4.8% in the first quarter, is projected to fall into recession in 2020, with a contraction of 5.0% in a likely scenario (McKibbin and Fernando 2020; Fernandes 2020).”
Compound natural and human disasters: Managing drought and COVID-19 to sustain global agriculture and food sectors (2020, background): “Much of the economic cost of a pandemic may occur during the period of constrained activities before ﬁ nding a solution or extinguishing the disease (Fernandes, 2020).”
Robustness and resilience of complex networks (2024, background): “115) that led to a worldwide recession and a radical modification of living standards.”
The impact of COVID-19 pandemic on bank lending around the world (2021, neutral): “…shortfall due to COVID-19 lockdowns for a sample of Italian firms, Demirgüç-Kunt et al. (2020) who analyze bank stock prices around the world, Fernandes (2020) who estimates the impact of the pandemic on the GDP growth, Halling, Yu, and Zechner (2020) who demonstrate the patterns of public…”
The Impact of Covid-19 Pandemic on the Global Economy: Emphasis on Poverty Alleviation and Economic Growth (2021, background): “…the imposition on travel bans, restriction on the attendance of public events and tourist attraction site visits have contributed negatively to the hospitality and tourism sectors where most businesses have encountered a decline in their business activities by almost 90% (Fernandes, 2020).”
Volatility in International Stock Markets: An Empirical Study during COVID-19 (2020, neutral): “(Fletcher and Kihanda 2005; Teplova and Shutova 2011; Chaudhary et al. 2020).”
Competing during a pandemic? Retailers’ ups and downs during the COVID-19 outbreak (2020, neutral): “5-month containment strategy (Fernandes, 2020), although variation across the country is high (Makridis & Hartley, 2020).”
COVID-19 pandemic and economic crisis: the Nigerian experience and structural causes (2020, neutral): “A recent literature has emerged that examine the effect of COVID-19 on economic activities (Fernandes, 2020; Atkeson, 2020; McKibbin and Fernando, 2020; Altig et al, 2020; Ozili and Arun, 2020).”
Searching for safe-haven assets during the COVID-19 pandemic (2020, background): “Fernandes (2020), for example, estimated that the outbreak could cause a median economic slowdown of 2.8%, while the extreme case, such as Spain, could fall by more than 15%.”
COVI White Paper (2020, background): “The pandemic has created a global health emergency that has drastically impacted all aspects of modern life and has strained global healthcare systems, economies, and political institutions [2, 3, 4].”
A preliminary assessment of the impact of COVID-19 on environment – A case study of China (2020, neutral): “Secondly, in order to control the spread of the epidemic, countries have strictly restricted themovement of people and transportation, and economic activities have been greatly reduced (Fernandes, 2020), which puts pressure on economic operations from both consumption and production sides.”
Neural Networks Fail to Learn Periodic Functions and How to Fix It (2020, methodology): “For training, we take the daily data from 1995-1-1 to 2020-1-31, around 6300 points in total, the ending time is deliberately chosen such that it is before the COVID19 starts to affect the global economy [3, 11].”
Innovative Finance, Technological Adaptation and SMEs Sustainability: The Mediating Role of Government Support during COVID-19 Pandemic (2021, background): “This, including unemployment creation, social security imbalance, financial activities disruption, and aggregate production, have had significant impacts on society [8].”
How should we understand the digital economy in Asia? Critical assessment and research agenda (2020, neutral): “All major countries have been suffering an overall contraction of their GDP in 2020, with China as the only exception, yet for which 2.6% GDP growth is still expected (Fernandes, 2020).”