Economic impact of the COVID-19 pandemic

Nations, cities and other collectives with governance mechanisms worldwide have announced the development and implementation of programmes for guided economic recovery.[62][63][64][65][66][67][68][69] Some economic recovery programmes include Next Generation EU and Pandemic Emergency Purchase Programme.

A study published in August 2020 concluded that the direct effect of the response to the pandemic on global warming will likely be negligible and that a well-designed economic recovery could avoid future warming of 0.3 °C by 2050. The study indicates that systemic change for decarbonization of humanity's economic structures is required for a substantial impact on global warming, which also has economic aspects.[70][71] Beyond targeted financing of green projects or sectors, contemporary decision-making mechanisms also allow for excluding projects with substantial environmental, social, or climate risks from financial relief. Over 260 civil society organizations called on Chinese actors to ensure that COVID-19 related Belt and Road Initiative funding excludes such projects.[72] In November 2020 the IMF said that governments and central banks had promised $19.5 trillion of support since the coronavirus began.[73]

The United Nations Environment Programme analyzed $14.6 trillion of global spending in 2020, and found that only 2.5% was directed towards tackling climate change, advising governments to "make use of recovery spending to steer away from the worst impacts of climate change and inequality".[74] A 2022 analysis of G20 country spending found that about 6% of their pandemic recovery spending has been allocated to areas that will also cut greenhouse-gas emissions, including electrifying vehicles, making buildings more energy efficient and installing renewables.[75]

New vehicle sales in the United States have declined by 40%.[109] The American Big Three have all shut down their US factories.[110] The German automotive industry came into the crisis after having already suffered from the Dieselgate-scandal, as well as competition from electric cars.[111] Boeing and Airbus suspended production at some factories. A survey conducted by the British Plastics Federation (BPF) explored how COVID-19 is impacting manufacturing businesses in the United Kingdom (UK). Over 80% of respondents anticipated a decline in turnover over the next 2 quarters, with 98% admitting concern about the negative impact of the pandemic on business operations.[112][113] July 2021, Car production in the United Kingdom hits lowest level since 1956.[114]

The pandemic has impacted the film industry. Across the world and to varying degrees, cinemas have been closed, festivals have been cancelled or postponed, and film releases have been moved to future dates. As cinemas closed, the global box office dropped by billions of dollars, while streaming became more popular and the stock of Netflix rose; the stock of film exhibitors dropped dramatically. Almost all blockbusters to be released after the March opening weekend were postponed or cancelled around the world, with film productions also halted. Massive losses in the industry have been predicted.[117]

Most major sporting events were cancelled or postponed,[118] including the 2020 Summer Olympics in Tokyo, which were postponed on 24 March 2020 until 2021.[119][120]

The COVID-19 pandemic has shut down or delayed production of television programs in several countries. However, a joint report from Apptopia and Braze[121] showed a 30.7% increase in streaming sessions worldwide on platforms such as Disney+, Netflix, and Hulu during the month of March.[122]

The pandemic also affected the video game sector to a smaller degree. As the outbreak appeared in China first, supply chains affected the manufacturing and production of some video game consoles, delaying their releases and making current supplies scarcer. As the outbreak and pandemic spread, several keystone trade events, including E3 2020, were cancelled over concerns of further spread. The economic impact on the video game sector is not expected to be as large as in film or other entertainment sectors as much of the work in video game production can be decentralised and performed remotely, and products distributed digitally to consumers regardless of various national and regional lockdowns on businesses and services.[123]

By April, department store retailers JCPenney, Nordstrom, Macy's and Kohl's had lost $12.3 billion combined in market caps. Neiman Marcus and JCPenney defaulted on bond payments in April, preparing internally for bankruptcy court and bankruptcy protection.[147] J.Crew and Neiman Marcus filed for bankruptcy during the first week of May; they were reportedly the first two major retailers to do so during the pandemic.[148][149] JCPenney filed for bankruptcy on 15 May.[150]

In May, Pier 1 announced it would close as soon as possible. It had sought court protection in February and had hoped that someone would buy the business, but the subsequent recession made this seem unlikely.[151]

In early 2021, Family Video announced all their remaining stores would be liquidated and closed down.

Flight stats by year

  Flight cancellations

  Flight delays

  On-time Arrivals

Delta Air Lines planes parked on a taxiway at Kansas City International Airport. The planes are parked due to the sharp decrease in demand for air travel.

The pandemic has had a significant impact on the aviation industry due to the resulting travel restrictions as well as a slump in demand among travellers. Significant reductions in passenger numbers have resulted in planes flying empty between airports and the cancellation of flights.

United States passenger airlines can expect about $50 billion in subsidies from the Coronavirus Aid, Relief, and Economic Security Act.[177]

Cruise lines had to cancel sailings after the outbreak of the COVID-19 pandemic. Bookings and cancellations grew as extensive media coverage of ill passengers on quarantined ships hurt the industry's image.[177]

Shares of cruise lines fell sharply in value on 27 March 2020 when the $2 trillion Coronavirus Aid, Relief, and Economic Security Act excluded companies that are not "organized" under United States law. Senator Sheldon Whitehouse (D-RI) tweeted: "The giant cruise companies incorporate overseas to dodge US taxes, flag vessels overseas to avoid US taxes and laws, and pollute without offset. Why should we bail them out?" Senator Josh Hawley (R-MO) tweeted that cruise lines should register and pay taxes in the United States if they expect a financial bailout. U.S-based employees and small, American-owned companies are eligible for financial assistance.[177]

Several rail operators had to receive state aid and/or reduced their scheduled services. Deutsche Bahn received billions of € in federal aid to cover record losses.[178][179][180][181][182][183]

The economy of China was anticipated to generate billions in economic output. Morgan Stanley expected the economy of China to grow by between 5.6% (worst-case scenario) to 5.9% for 2020.[221] For reference, China generated US$143 billion in February 2019, the month of Chinese New Year.[222] The Chinese Ministry of Transport reported that trips on trains dropped 73% to 190 million trips from the previous year. Factories, retailers, and restaurant chains closed.[223]

All 70,000 theatre screens in the country were shuttered, wiping out the entire box office. This is drastically in stark difference from the week of Chinese New Year in 2019 that generated $836 million.[224]

Though cautioning that the economic impact would be short-term, PRC National Development and Reform Commission party secretary Cong Liang views small and medium businesses encountering more difficulties in their operations. Human Resources and Social Security Assistant Minister You Jun specified that agricultural workers and college graduates would have difficulties.[225]

Tourism in China has been hit hard by travel restrictions and fears of contagion, including a ban on both domestic and international tour groups.[226] Many airlines have either cancelled or greatly reduced flights to China and several travel advisories now warn against travel to China. Many countries, including France, Japan, Australia, New Zealand, the United Kingdom and the United States, have evacuated their nationals from the Wuhan and Hubei provinces.[227]

The majority of schools and universities have extended their annual holidays to mid-February.[228] Overseas students enrolled at Chinese universities have been returning home over fears of being infected—the first cases to be reported by Nepal and Kerala, a southern state of India, were both of students who had returned home.[229][230] Nearly 200 million students have been affected by the in-school closures, with the second semester after the Chunyun resuming on 17 February through online classes for students to follow from their homes instead. The Ministry of Education has introduced a 7,000-server supported "national Internet cloud classroom" to cater to the 50 million elementary and middle school student populations.[231]

The Finance Ministry of China announced it would fully subsidise personal medical costs incurred by patients.[232]

CNN reported that some people from Wuhan "have become outcasts in their own country, shunned by hotels, neighbors and – in some areas – placed under controversial quarantine measures."[233]

The sale of new cars in China has been affected due to the outbreak. There was a 92% reduction on the volume of cars sold during the first two weeks of February 2020.[234]

On 24 February, China's Standing Committee declared an immediate and "comprehensive" ban on its US$74 billion wildlife trade industry, citing the "prominent problem of excessive consumption of wild animals, and the huge hidden dangers to public health and safety" that has been revealed by the outbreak. This permanently extends the temporary ban already in place since the end of January.[235][236]

According to Carbon Brief, the coronavirus pandemic has resulted in China's greenhouse gas emissions being reduced by 25%.[237] In March 2020, satellite images from space provided by NASA revealed that pollution has dropped significantly, which has been attributed in part to the slowdown of economic activity as a result of the outbreak.[238]

People in Wuhan lining up in front of a drug store to buy surgical masks

A notice at a supermarket in Beijing, which says each person can only buy one pack of surgical masks and one bottle of 84 disinfectant liquid a day

As the epidemic accelerated, the mainland market saw a shortage of face masks due to the increased need from the public.[239] It was reported that Shanghai customers had to queue for nearly an hour to buy a pack of face masks which was sold out in another half an hour.[240] Some stores hoarded supplies, driving up prices, so the market regulator cracked down on such acts.[241][242] The shortage will not be relieved until late February, when most workers return from the New Year vacation, according to Lei Limin, an expert in the industry.[243]

On 22 January 2020, Taobao, China's largest e-commerce platform owned by Alibaba Group, said that all face masks on Taobao and Tmall would not be allowed to increase in price. Special subsidies would be provided to the retailers. Also, Alibaba Health's "urgent drug delivery" service would not be closed during the Spring Festival.[244] JD, another leading Chinese e-commerce platform, said, "We are actively working to ensure supply and price stability from sources, storage and distribution, platform control and so on" and "while fully ensuring price stability for JD's own commodities, JD.com has also exercised strict control over the commodities on JD's platform. Third-party vendors selling face masks are prohibited from raising prices. Once it is confirmed that the prices of third-party vendors have increased abnormally, JD will immediately remove the offending commodities from shelves and deal with the offending vendors accordingly."[245] Other major e-commerce platforms including Sunning.com and Pinduoduo also promised to keep the prices of health products stable.[246][247]

China's economic growth is expected to slow by up to 1.1% in the first half of 2020 as economic activity is negatively affected by the new coronavirus pandemic, according to a Morgan Stanley study cited by Reuters.[248] But on 1 February 2020, the People's Bank of China said that the impact of the epidemic on China's economy was temporary and that the fundamentals of China's long-term positive and high-quality growth remained unchanged.[249] In late January, economists predicted a V-shaped recovery. By March, it was much more uncertain.[250]

Due to the outbreak, the Shanghai Stock Exchange and the Shenzhen Stock Exchange announced that with the approval of the China Securities Regulatory Commission, the closing time for the Spring Festival will be extended to 2 February and trading will resume on 3 February.[251][252] Before that, on 23 January, the last trading day of a shares before the Spring Festival, all three major stock indexes opened lower, creating a drop of about 3%, and the Shanghai Composite Index fell below 3000.[253] On 2 February, the first trading day after the holiday, the three major indexes even set a record low opening of about 8%.[254] By the end of the day, the decline narrowed slightly to about 7%, the Shenzhen index fell below 10,000 points, a total of 3,177 stocks in the two markets fell.[255]

The People's Bank of China and the State Administration of Foreign Exchange have announced that the inter-bank Renminbi foreign exchange market, the foreign currency-to-market and the foreign currency market will extend their holiday closed until 2 February 2020.[256] When the market opened on 3 February, the Renminbi was now depreciating against major foreign currencies. The central parity rate of the Renminbi against the US dollar opened at 6.9249, a drop of 373 basis points from the previous trading day.[257] It fell below the 7.00 than an hour after the opening,[258] and closed at 7.0257.[259]

The World Bank expects China to grow by just 0.1–2.3%, the lowest growth rate in decades.[260]

On 22 May, Chinese Premier Li Keqiang announced that, for the first time in history, the central government wouldn't set an economic growth target for 2020, with the economy having contracted by 6.8% compared to 2019 and China facing an "unpredictable" time. However, the government also stated an intention to create 9 million new urban jobs until the end of 2020.[261]

In October 2020, it was announced that China's third-quarter GDP has grown with 4.9%, hereby missing analysts expectations (which was set at 5,2%). However, it does show that China's economy has indeed been steadily recovering from the coronavirus shock that caused decades-low growth.[262] To fuel economic growth, the country set aside hundreds of billions of dollars for major infrastructure projects and used population tracking policies and enforced the stringent lockdown to contain the virus.[263] It is the only major economy that is expected to grow in 2020, according to the International Monetary Fund.[264]

By December 2020, China's economic recovery was accelerating amid increasing demand for manufactured goods.[265] The UK-based Centre for Economics and Business Research projected that China's "skilful management of the pandemic" would cause the Chinese economy to surpass the United States and become the world's largest economy by nominal GDP in 2028, five years sooner than previously expected.[266][267]

Hong Kong has seen high-profile protests that saw tourist arrivals from mainland China plummet over an eight-month period. The viral epidemic put additional pressure on the travel sector to withstand a prolonged period of downturn.[268] A drop in arrivals from third countries more resilient during the previous months has also been cited as a concern.[227] The city is already in recession[268] and Moody has lowered the city's credit rating.[269][270]

There has also been a renewed increase in protest activity as hostile sentiment against mainland Chinese strengthened over fears of viral transmission from mainland China, with many calling for the border ports to be closed and for all mainland Chinese travellers to be refused entry. Incidents have included a number of petrol bombs being thrown at police stations,[271] a homemade bomb exploding in a toilet,[272] and foreign objects being thrown onto transit rail tracks between Hong Kong and the mainland Chinese border.[273] Political issues raised have included concerns that mainland Chinese may prefer to travel to Hong Kong to seek free medical help (which has since been addressed by the Hong Kong government).[274][275]

Since the outbreak of the virus, a significant number of products have been sold out across the city, including face masks and disinfectant products (such as alcohol and bleach).[276] An ongoing period of panic buying has also caused many stores to be cleared of non-medical products such as bottled water, vegetables and rice.[277] The Government of Hong Kong had its imports of face masks cancelled as global face mask stockpiles decline.[278]

In view of the coronavirus pandemic, the Education Bureau closed all kindergartens, primary schools, secondary schools, and special schools until 17 February.[279] This has been extended for multiple times due to the development of the epidemic,[280][281][282] until the Bureau announced that all schools would be indefinitely suspended until further notice on 31 March.[283] The disruption has raised concerns over the situation of students who are due to take examinations at the end of the year, especially in light of the protest-related disruption that happened in 2019.[284]

On 5 February, flag carrier Cathay Pacific requested its 27,000 employees to voluntarily take three weeks of unpaid leave by the end of June. The airline had previously reduced flights to mainland China by 90% and to overall flights by 30%.[285]

On 4 February 2020, all casinos in Macau were ordered shut down for 15 days.[286][287] All casinos reopened on 20 February 2020,[288] but visitor numbers remained low due to the pandemic, with hotels at less than 12% occupancy at the end of February.[189]

Shelves in a pharmacy in Japan sold out of masks on 3 February 2020

Former Prime Minister Shinzō Abe has said that "the new coronavirus is having a major impact on tourism, the economy and our society as a whole".[289][290] Face masks have sold out across the nation and stocks of face masks are depleted within a day of new arrivals.[291] There has been pressure placed on the healthcare system as demands for medical checkups increase.[292] Chinese people have reported increasing discrimination.[293] The health minister has pointed out that the situation has not reached a point where mass gatherings must be called off 1 February 2020.[294]

Aviation, retail and tourism sectors have reported decreased sales and some manufactures have complained about disruption to Chinese factories, logistics and supply chains.[295] Prime Minister Abe has considered using emergency funds to mitigate the outbreak's impact on tourism, of which Chinese nationals account for 40%.[296] S&P Global noted that the worst hit shares were from companies spanning travel, cosmetics and retail sectors which are most exposed to Chinese tourism.[297] Nintendo announced that they would delay shipment of the Nintendo Switch, which is manufactured in China, to Japan.[298]

The outbreak itself has been a concern for the 2020 Summer Olympics which is scheduled to take place in Tokyo starting at the end of July. The national government has thus been taking extra precautions to help minimise the outbreak's impact.[299][300] The Tokyo organising committee and the International Olympic Committee have been monitoring the outbreak's impact in Japan.[299]

On 27 February 2020, Prime Minister Shinzo Abe requested that all Japanese elementary, junior high, and high schools close until late March, the end of the school year, to help contain the virus. Schools will only reopen for the next term after spring break in early April and the nationwide closures will affect 13 million students.[301][302]

Coronavirus infection prevention tips banner in Seoul

On 5 February 2020, Hyundai Motor Company was forced to suspend production in South Korea due to shortage in supply of parts.[303][304]

South Korea has been reporting increasing human-to-human community transmission of COVID-19 since 19 February 2020, traced to a church of Shincheonji, located near the city of Daegu. Apart from the city of Daegu and the church community involved, most of South Korea is operating close to normality, although nine planned festivals have been closed and tax-free retailers are closing.[305] South Korean military manpower agency made an announcement that conscription from the Daegu will temporarily be suspended.[306] The Daegu Office of Education decided to postpone the start of every school in the region by one week.[307]

Numerous educational institutes have temporarily shut down, including dozens of kindergartens in Daegu and several elementary schools in Seoul.[308] As of 18 February, most universities in South Korea had announced plans to postpone the start of the spring semester. This included 155 universities planning to delay the semester start by 2 weeks to 16 and 22 March universities planning to delay the semester start by 1 week to 9 March.[309] Also, on 23 February 2020, all kindergartens, elementary schools, middle schools, and high schools were announced to delay the semester start from 2 to 9 March.[310]

The economy of South Korea is forecast to grow 1.9%, which is down from 2.1%. The government has provided 136.7 billion won for local governments as support.[305] The government has also organised the procurement of masks and other hygiene equipment.[305]

Surgical masks used by people in Taiwan

Surgical masks and other medical equipment sold out in Taiwan

On 24 January, the Taiwanese government announced a temporary ban on the export of face masks for a month to secure a supply of masks for its own citizens.[311][312] On 2 February 2020, Taiwan's Central Epidemic Command Center postponed the opening of primary and secondary schools until 25 February.[313][314] Taiwan has also announced a ban of cruise ships from entering all Taiwanese ports.[315] In January, Italy has banned flights from mainland China, Hong Kong, Macau, and Taiwan. On 10 February, the Philippines announced it will ban the entry of Taiwanese citizens due to the One-China Policy.[316] Later on 14 February, Presidential Spokesperson of Philippines, Salvador Panelo, announced the lifting of the temporary ban on Taiwan.[317] In early February 2020 Taiwan's Central Epidemic Command Center requested the mobilisation of the Taiwanese Armed Forces to contain the spread of the virus and to build up the defences against it. Soldiers were dispatched to the factory floors of major mask manufacturers to help staff the 62 additional mask production lines being set up at the time.[318]

In the aviation industry, Taiwanese carrier China Airlines's direct flights to Rome have been rejected and cancelled since Italy has announced the ban on Taiwanese flights.[319] On the other hand, the second-largest Taiwanese carrier, Eva Air, has also postponed the launch of Milan and Phuket flights.[320] Both Taiwanese airlines have cut numerous cross-strait destinations, leaving just three Chinese cities still served.[321]

In India, economists expect the near-term impact of the outbreak to be limited to the supply chains of major conglomerates, especially pharmaceuticals, fertilisers, automobiles, textiles and electronics. A severe impact on global trade logistics is also expected due to disruption of logistics in mainland China, but due to the combined risk with regional geopolitical tensions, wider trade wars and Brexit.[322] The stock market took a bearish mode in response to COVID-19. The BSE SENSEX fell 2919 and NIFTY 50 fell 950 points in a single day on 12 March 2020.[323]

On 19 March 2020, the Indian government has banned the export of ventilators, surgical/disposable masks and textile raw materials out of the country.[324] Oil has plummeted to 18-year low of $22 per barrel in March, and Foreign Portfolio Investors (FPIs) have withdrawn huge amounts from India, about US$571.4 million. While lower oil prices will shrink the current account deficit, reverse capital flows will expand it. Rupee is continuously depreciating. MSMEs will undergo a severe cash crunch.[325]

The economy of Pakistan faced a devastating impact from the coronavirus outbreak because it was in recessionary conditions in the quarter prior to the pandemic.[326] Weak social protections and low investment in healthcare meant that most citizens were vulnerable to pandemic conditions at the time of the outbreak.[327] Forecasts of the economic loss from the three-month lockdown, which was subsequently eased in late May 2020, indicated that Pakistan would face its first annual economic recession since 1952.[328] Given the strained government resources, civil society and charity organizations became much more active in providing relief to the public during the national lockdown.[329]

In February 2020, research houses expected the economic impact in Sri Lanka to be limited to a short-term impact on the tourism and transport sectors.[330]

Coronavirus fears lead to panic buying of essentials in Singapore

Among Association of Southeast Asian Nations countries, the city-state of Singapore was forecast to be one of the worst-hit countries by Maybank.[331] The tourism sector was considered to be an "immediate concern" along with the effects on production lines due to disruption to factories and logistics in mainland China.[332] Singapore has witnessed panic buying of essential groceries,[333] and of masks, thermometers and sanitation products despite being advised against doing so by the Government.[334][335] Prime Minister Lee Hsien Loong said that a recession in the country is a possibility and that the country's economy "would definitely take a hit".[336] On 17 February, the Ministry of Trade and Industry (MTI) downgraded Singapore's forecast GDP growth to between −0.5% and 1.5%.[337] This is largely due to the fall in tourism and social distancing restrictions.[337] On 26 March, MTI said it believed that the economy would contract by between 1% and 4% in 2020. This was after the economy shrank some 2.2% in the first quarter of 2020 from the same quarter in 2019.[338] On 26 May, the Singapore economy contracted 0.7%YoY, which was better than the expected contraction of 2.2%. However, MTI said that it was revising down its expectation for the Singapore economy in 2020 to shrink by 4% to 7%.[339] Economists were behind the curve in downgrading their numbers.[340] Euben Paracuelles, at Nomura argued that while some ASEAN economies had success in containing the virus, the presence of global uncertainties meant that any regional recovery would be restrained. For example, while Thailand had managed to contain the virus, it was not open to tourism, which forms a substantial part of its economy.[341]

Prime Minister Hun Sen of Cambodia made a special visit to China with an aim to showcase Cambodia's support to China in fighting the outbreak of the epidemic.[342]

Maybank economists rated Thailand as being most at risk, with the threat of the viral outbreak's impact on tourism causing the Thai baht to fall to a seven-month low.[343]

Panic buying in a supermarket in Indonesia

In Indonesia, over 10,000 Chinese tourists cancelled trips and flights to major destinations such as Bali, Jakarta, Bandung, etc., over coronavirus fears. Many existing Chinese visitors are queuing up with the Indonesian authority appealing for extended stay.[344] Panic buying has also hit the capital city, Jakarta. As the first reported cases of COVID-19 was announced by the government at 3 March.[345]

In Malaysia, economists predicted that the outbreak would affect the country's GDP, trade and investment flows, commodity prices and tourist arrivals.[346] Initially, the cycling race event Le Tour de Langkawi was rumoured to be cancelled, but the organiser stated that it would continue to be held as usual. Despite this, two cycling teams, the Hengxiang Cycling Team and the Giant Cycling Team, both from China, were pulled from participating in this race due to fear of the coronavirus pandemic.[347] As the outbreak situation has worsened, some of the upcoming concerts held in the country, such as Kenny G, Jay Chou, Joey Yung, The Wynners, Super Junior, Rockaway Festival and Miriam Yeung, were postponed to a future date, and the upcoming Seventeen concert was cancelled.[348]

The Philippines reported that its GDP contracted by 9.5% in 2020, its worst contraction since World War II. The last full-year contraction in the country was in 1998 amidst the Asian financial crisis where its GDP grew by −0.5%. The 2020 contraction was also worse than the 7% contraction in 1984.[349]

Vietnam, who had clamped down early to prevent the spread of the coronavirus, was expected to be the only country in the South East Asia region that was expected to grow in 2020.[350]

On 26 March, Rouhani requested to withdraw 1 billion dollars from National Development Fund and Khamenei allowed the withdrawal within eleven days. On 28 March, Rouhani announced that 20% of the country's annual budget would be allocated to fight the virus. The following day, he defended against criticisms of the government's response to the outbreak, saying that he needed to weigh protecting the country's economy that was already affected by US sanctions while fighting the worst outbreak of the region.

At its peak, Israel was one of the world's worst hit countries from the COVID-19 pandemic. By 1 April 2020, the national unemployment rate had reached 24.4 percent. In the month of March alone, more than 844,000 individuals applied for unemployment benefits—90% of whom had been placed on unpaid leave due to the pandemic. Following the world's fastest and most successful vaccination campaigns by far using the Pfizer-BioNTech jab,[351] Israel currently issues 'green passports' for individuals who have received their 2nd vaccine dose; which allow indefinite access to many places and amenities formerly only accessible to those with a negative COVID-19 test result. The subsequent low-infection rates have eased restrictions and the economic tension in the country.[351]

As of 29 March 2021; 5,227,689 Israelis have received at least 1 dose of the vaccine, out of which 4,739,694 have had 2 doses.[352]

On 30 March 2020, Prime Minister Netanyahu announced an economic rescue package totaling 80 billion shekels ($22 billion), saying that was 6% of the country's GDP. The money will be allocated to health care (10 billion₪); welfare and unemployment (30 billion₪) aid for small and large businesses (32 billion₪), and to financial stimulus (8 billion₪).[353]

Israel agreed to pay Russia to send Russian-made Sputnik V vaccine doses to Syria as part of a Russia-mediated prisoner swap agreement.[354]

In 2020, Israel's economy shrank by 2.4%, following 3.4% and 3.5% growth in 2019 and 2018 respectively. This is considerably below the Euro-bloc where the economy shrank by 5%.[355]

On 27 February, Saudi Arabia halted travel to Mecca and Medina over coronavirus. This has prevented foreigners from reaching the holy city of Mecca and the Kaaba. Travel was also suspended to Muhammad's mosque in Medina.[356] Images of the emptied ṣaḥn of the Great Mosque of Mecca, where pilgrims are ordinarily performing the tawaf around the Kaaba, went viral on social media.[357]

The COVID-19 pandemic reportedly pressured the property sector, which has already been dealing with the imbalance between supply and demand for years. Dubai's property firms, Emaar Properties, and DAMAC Properties reported losses following the surge in COVID-19. Emaar reported a 58% loss in net profit while DAMAC Properties reported a net loss of 1.04 billion dirhams in the year 2020.[358]

In March 2021, the restrictions on global supply-chain caused a great impact on Dubai's business activities, which were struggling to recover from the impact of the Covid-19 pandemic. The IHS Markit compiled Dubai's Purchasing Managers’ Index that rose to 51 from 50.9 in February 2021, saving from landing in the contraction zone by only one point. The global supply difficulties also led to "constraint profit margins", as the need of demand recovery forced firms to lower output charges.[359]

Jordan's real GDP fell by 1.6% in 2020, with a dramatic reduction in tourism, one of its most crucial economic sectors. The sector's GDP fell by 3%. [360][361]

SMEs appeared less affected by the pandemic than bigger enterprises. 50% of banks questioned reported an increase in loan supply to SMEs, while 25% reported a reduction. For corporates, the increase in loan supply was 25% and 45% reported a reduction. [362] The country's unemployment rate hit 25% in 2021, the highest in more than 25 years. [363]

Macroeconomic stability, however, has been maintained, and the International Monetary Fund expects modest growth rates for 2022 (2.7%) and 2023 (2.7%) in predictions provided in the October 2021 World Economic Outlook. In the first half of 2021, real GDP increased by 3.2%. [364]

European Investment Bank Investment Survey 2020[365]

In Spain, a large number of exhibitors (including Chinese firms Huawei and Vivo) announced plans to pull out of or reduce their presence at Mobile World Congress, a wireless industry trade show in Barcelona, due to concerns over coronavirus.[366][367][368] On 12 February 2020, GSMA CEO John Hoffman announced that the event had been cancelled, as the concerns had made it "impossible" to host.[369]

Owing to an increase in the demand for masks,[370] on 1 February most masks were sold out in Portuguese pharmacies.[371] On 4 February, President Marcelo Rebelo de Sousa admitted that the epidemic of the new coronavirus in China "affects the economic activity of a very powerful economy and thus affects the world's economic activity or could affect". He also admitted the possibility of economic upheavals due to the break in production."[372] On 28 February, the Swiss government has banned all public and private gatherings of more than 1,000 people until 15 March, including forcing through a cancellation of the Geneva International Motor Show.[373]

European Commissioner for Internal Market and Services Thierry Breton has asked streaming video services operating in the EU to reduce the amount of bandwidth used by their services to preserve capacity and infrastructure. Netflix and YouTube havecomplied with this request.[374][375]

According to the a survey on investment conducted by the European Investment Bank, European firms lost one-quarter of their gross income on average in the second quarter of 2020.[376][377] The loss was substantially greater than the drop experienced by enterprises during the global financial crisis in 2008 and the European sovereign debt crisis in 2010.[376][378]

The European Investment Bank estimates that corporate investment in the EU could fall by between 31% and 52%, even in more favourable scenarios due to the pandemic. They also estimate that even after strong policy intervention, 51–58% of EU firms face liquidity shortfalls after 3 months of lockdown.[379] 34% of enterprises also projected their capacity to fund internal investments to decline in the coming 12 months. The European Investment Bank Group created a €25 billion Pan-European Guarantee fund to help small businesses recover from the COVID-19 crisis. As a result of this guarantee fund, the EIB Group, in partnership with local lenders and national promotional institutions, is able to increase its support to small and medium-sized companies.

Expectations of the pandemic's long-term impact in EU firms.[380]

Small businesses have been hit hard by the COVID-19 pandemic and its lockdowns. Many of them also lacked the technological tools to survive in an unprecedented environment. To make things worse, in the European regions most affected by the coronavirus pandemic small businesses are usually less digitalised.[381][382][383]

Less than 20% of European small and medium-sized enterprises (SMEs) are highly digitalised, whereas almost 50% of large corporations are digitalised, having an economic impact. Small businesses are the engine of the European economy and they play a vital role in our economic recovery and growth. These businesses need financial support for their digitalisation.[381][382][383]

Due to the COVID-19 pandemic, 49% of enterprises in the European Union saw a drop in sales in 2021, compared to 21% who saw a boost.[384][385][386] Digital businesses withstood the pandemic better than enterprises that were less productive before the crisis.[384][387] Sales were down more for Small businesses, by at least 25%, than for medium or large businesses.[384][385][386] In response to fewer sales, 23% reduced their investment intentions, while just 3% intended to increase their investment.[384][388] The share of companies that invested dropped from 86% in 2019 to 79% in 2021.[384][389]

Furlough and short-term employment programmes in the European Union kept people employed, while bankruptcy filing rules for businesses were reduced, allowing workers to keep their jobs.[390][391][392][393] A significant portion of businesses benefited from the policy support for the COVID-19 shock across all EU regions. The most prevalent forms of assistance across all areas were subsidies or other non-repayable support measures, including support for furlough programs. Inequality existed across EU regions. Compared to enterprises in less developed regions (40%) or non-cohesion regions (37%) firms in transition regions were less likely to get subsidies (28%). [394][395]

Since the beginning of 2020, EU enterprises that embraced advanced digital technology and invested in becoming more digital during the pandemic have increased the number of employees they employ.[396][397][398] After the COVID-19 outbreak, the number of non-digital enterprises that downsized was also greater than the share of non-digital firms that had positive job growth. Non-digital companies had a negative net employment balance.[396][399]

Eastern Europe (together with Central Asia) saw a dramatic drop in economic activity as a result of COVID-19. GDP in the region fell by 4% on average in 2020, with businesses in contact-intensive service industries being particularly adversely impacted. However, the level of governmental support was vast, with fiscal measures totaling about 6% of GDP.[400][401]

On 8 April, the Bank of France officially declared that the French economy was in recession, shrinking by 6 percent in the first quarter of 2020.[402]

According to the Deutsche Bank the outbreak of the novel coronavirus / COVID-19 May contribute to a recession in Germany.[403]

By mid-March, nearly 3% of Ireland's population—140,000 people (including 70,000 restaurant staff, 50,000 pub and bar staff)—had lost their jobs due to restrictions brought in to delay the virus's spread.[404] The numbers of people in normally busy Dublin areas such as Grafton Street dropped by percentages in the sixties, seventies and eighties.[405][406]

On 16 March, Minister for Employment Affairs and Social Protection Regina Doherty announced the COVID-19 Pandemic Unemployment Payment.[407] Initially available for six weeks, it was extended for another nine weeks on 5 June.[408] On 24 March, the Temporary COVID-19 Wage Subsidy Scheme was announced for a twelve-week run beginning on 26 March.[409]

On 15 May, Minister for Business, Enterprise and Innovation Heather Humphreys announced details of a new €250m "Restart Grant" which would give direct grant aid of between €2,000 and €10,000 to small businesses to help them with the costs associated with reopening and re-employing workers following the COVID-19 closures.[410]

On 22 May, the Government of Ireland had signed off on €6.8 billion in extra funding for the Department of Employment Affairs and Social Protection, as it was due to reach this year's spending limit early the following month.[411]

On 23 July, the Government of Ireland launched a €7.4 billion July Jobs Stimulus package of 50 measures to boost economic recovery and get people back to work.[412] The measures include the extension of the COVID-19 Pandemic Unemployment Payment to April 2021, and the replacement of the Temporary COVID-19 Wage Subsidy Scheme to the Employment Wage Subsidy Scheme from September 2020 and will run until April 2021.[413]

On 7 September, it was announced that Ireland was now officially in recession after the economy shrank by 6.1% between April and June as the impact of COVID-19 brought the largest quarterly drop on record, following new figures published by the Central Statistics Office.[414][415]

Civil Protection volunteers carrying out health checks at the Guglielmo Marconi Airport in Bologna, Italy

Empty shelves at the Esselunga supermarket in Bergamo, Italy

On 21 February, at least ten towns in the Lombardy and Veneto regions of Italy, with a total population of 50,000, were locked down in quarantine procedure following an outbreak in the town of Codogno in Lombardy. Police mandated a curfew closing all public buildings and controlling access through police checkpoints to the so-called 'red zone' which is enforced under penalty by fines against trespassers who are not health or supply workers.[416] The government of Italian Prime Minister Giuseppe Conte vowed that sending in "the armed forces" to enforce the lockdown was within possibility.[417] Schools and universities have been closed throughout Northern Italy along with museums, and various festivities, concerts, sporting events and church masses have been cancelled as of 23 February.[418] On 4 March, these closures were extended to all schools and universities nationwide.[419]

Sustained panic buying of groceries has reportedly cleared out supermarkets, and several major events were cancelled, such as the annual Carnival of Venice, along with the cancellation of Serie A football matches on 23 February by the Sports Ministry.[420] Concerns about the Milan Fashion Week has led to several fashion houses declaring that they will only hold broadcast, closed-door shows with no spectators. As of 26 February 2020, there have been 456 coronavirus cases in Italy, 190 of which have been also confirmed by the Istituto Superiore di Sanità.[421][422]

By 12 March 2020, the number of cases in Italy had risen to 15,113, including 1,016 fatalities.[423] On 9 March 2020, Italy declared a nationwide quarantine.[424] Since 10 March 2020, all residents need a special form to be allowed to leave their homes.[425] On 11 March 2020, all shops and businesses were closed except food shops and pharmacies.[426] After the "Sostegni Decree" of 23 March 2021,[427] the Italian government has ended the ban on collective dismissals since 1 July,[428] except for the textile, fashion and footwear economic sectors for which it has been extended until 31 October.[429]

Due to an increase in the demand for masks,[370] on 1 February most masks were sold out in Portuguese pharmacies.[371]

On 4 February, Marcelo Rebelo de Sousa, the President of the Portuguese Republic, admitted that the epidemic of the new coronavirus in China "affects the economic activity of a very powerful economy and thus affects the world's economic activity or could affect". He also admitted the possibility of economic upheavals due to the break in production."[372]

An ongoing economic crisis in Turkey was exacerbated by the COVID-19 pandemic. Sale of Turkish goods worldwide fell due to the global economic slowdown. President Recep Tayyip Erdoğan cut interest rates in late 2021 in response to a surge in inflation of the Turkish lira.[430][431]

Pensive shopper during the Coronavirus Covid-19 outbreak in the U.K.

On 13 February, heavy equipment manufacturer JCB announced its plan to reduce working hours and production due to shortages in their supply chain caused by the outbreak.[432]

On 5 March, British airline Flybe finally collapsed into administration with the loss of 2,000 jobs after failing to secure financial support. The airline said the impact of the coronavirus pandemic is partly to blame for its collapse. Flybe provided more than half of UK domestic flights outside London.[433]

During the pandemic, exports of many food and drink products from the UK declined significantly,[434] and that included Scotch whisky. Distillers were required to close for some time and the hospitality industry worldwide experienced a major slump.[435] According to news reports in February 2021, the Scotch whisky sector had experienced £1.1 billion in lost sales. A BBC News headline on 12 February 2021 summarized the situation: "Scotch whisky exports slump to 'lowest in a decade'".[436]

Tourism in the UK (by visitors from both the UK and from other countries) declined substantially due to travel restrictions and lockdowns. For much of 2020, and into 2021, vacation travel was not permitted and entry into the UK was very strictly limited. Business travel, for example, declined by nearly 90% over previous years.[437] [438] This not only affected revenue from tourism but also led to numerous job losses.[439]

On 4 March, Canadian Prime Minister Justin Trudeau announced the creation of a new cabinet committee to manage the federal response to the coronavirus disease.[440] A week later, on 11 March, the government announced a CA$1 billion COVID-19 Response Fund that included a $50 million contribution to the World Health Organization and an additional $275 million to fund coronavirus research in Canada.[441][442]

On 13 March, the Bank of Canada lowered the overnight rate target by 50 basis points to 0.75 percent in an unscheduled rate decision citing the "negative shocks to Canada's economy arising from the COVID-19 pandemic and the recent sharp drop in oil prices."[443][444] In June 2020, Canada lost its triple "A" credit rating.[445]

The National Institute of Statistics and Geography (INEGI) said the unemployment rate in Mexico increased from 3.6% in January 2020 to 3.7% in February 2020. The informal sector increased to 56.3% in February compared to 56.0% in February 2019. Fewer than half of Mexicans have paid sick leave or health care.[446] BBVA México predicted a 4.5% economic contraction in 2020, while analysts at Capital Economics in London argued that the government had to do more to support the economy. They forecast a 6% contraction in 2020. HR Ratings, Latin America's first credit rating agency, said that the performance of the economy would depend on the government's response to the COVID-19 crisis.[447]

The Mexican Stock Exchange fell to a record low on 10 March due to fears of the coronavirus and because of falling oil prices. The Bank of Mexico (Banxico) stepped in to prop up the value of the peso, which fell 14%.[448] World markets are seeing falls similar to those of 1987.[449]

The Consejo Nacional Empresarial Turístico (National Tourism Business Council, CNET) sent two letters in March to Alfonso Romo, Chief of Staff to the President of Mexico, outlining the importance of tourism to the economy and asking for government support for the sector. Tourism provides 4 million jobs in Mexico, and 93% of the companies have ten or fewer employees. COVID-19 forced the closure of 4,000 hotels (52,400 rooms) and 2,000 restaurants, while the airline industry lost MXN $30 billion (US$1.3 billion) through March.[450] The association of car dealers, ADMA, predicted a decrease in domestic sales between 16% and 25% in 2020.[451]

COVID-19 is expected to subtract US$5.8 billion from Panama's GDP.[452]

Empty shelves from panic buying at the Sams Club in Lufkin, Texas, on 13 March 2020.

Sign warning customers not to circumvent limits on toilet paper purchases at an upstate New York convenience store

The viral outbreak was cited by many companies in their briefings to shareholders, but several maintained confidence that they would not be too adversely affected by short-term disruption due to "limited" exposure to the Chinese consumer market. Those with manufacturing lines in mainland China warned about possible exposure to supply shortages,[453] while others cautioned that large corporations and the wealthy could exploit the crisis for economic gain in line with the Shock Doctrine, as has occurred after past pandemics[454]

Silicon Valley representatives expressed worries about serious disruption to production lines, as much of the technology sector relies on factories in mainland China. Since there had been a scheduled holiday over Lunar New Year, the full effects of the outbreak on the tech sector were considered to be unknown as of 31 January 2020, according to The Wall Street Journal.[455]

Cities with high populations of Chinese residents have seen an increase in demand for face masks to protect against the virus;[456] many are purchasing masks to mail to relatives in mainland China, Hong Kong, and Macau, where there is a shortage of masks.[457] As of February 2020, many stores in the United States had sold out of masks.[457][458] This mask shortage has caused an increase in prices.[459]

Universities in the United States have warned about a significant impact on their income due to a large number of Chinese international students potentially unable to attend classes.[460]

The Washington Post reported in February that President Donald Trump told advisors that he did not want the government to say or do anything that might spook the stock market, on concerns a large-scale outbreak could hurt his reelection chances.[461]

On 26 February, The New York Times (NYT) reported a case in California which the Center for Disease Control confirmed as the first possible community transmission of coronavirus in the United States.[462]

Closed Barber On P St NW in Washington DC

On 27 February, the NYT reported delay in diagnosis of the community transmission case in California.[463] A later article in the NYT on 27 February discussed a whistleblower's allegation's of the ineptitude of preparedness at Travis Air Force Base near Fairfield, California and March Air Reserve Base in Riverside County, California to receive possible coronavirus transmitters for diagnosis and treatment.[464] The same day, a report by Goldman Sachs forecast that it believes American companies "will generate no earnings growth in 2020," wiping out an earnings recovery that was expected for the year after "lackluster profit reports for most of 2019"[465]

On 27 February, U.S. stocks were on their way to the largest loss for a week since 2008, and the Dow Jones Industrial Average fell 1190 points in one day. On 28 February the average dropped below 25000 briefly.[466][467] The Dow Jones ended the week down 12.4 percent, the S&P 500 Index 11.5 percent, and the Nasdaq Composite down 10.5 percent.[468] Stocks fell to 18,592 points (Dow average) on 23 March after a procedural Senate vote on a coronavirus economic stimulus bill failed for the second time in two days.[469]

On 7 March, US stocks fell by 7 percent, triggering a temporary halt in trading, which was also aided by the 2020 Russia–Saudi Arabia oil price war.[470]

On the evening of 11 March, the National Basketball Association announced that the rest of its season would be suspended indefinitely, and the National Collegiate Athletic Association (NCAA) announced that its men's and women's basketball tournaments would be played without fans.[471] The following day, the NCAA initially announced that it would cancel the basketball tournaments,[472] but later that day announced that all championship events throughout all sports would be cancelled until 2020–21.[473]

Deep South states such as Alabama, Georgia, and Louisiana reported on April 6 that 70% of its reported deaths had involved African Americans.[474][475] It has been acknowledged that African Americans were more likely to have poor living conditions (including dense urban environments and poverty), employment instability, chronic comorbidities influenced by these conditions, and little to no health insurance coverage—factors which can all exacerbate its impact.[476][477]

In April, nearly a quarter of residents (renters and homeowners) did not pay full housing costs. Some did not pay rent/mortgage at all, while others did not make full payment.[478] The difficulties experienced by many tenants during the pandemic have sparked a movement to cancel rent, which is advocated by some activists, organizations, and politicians.[479][480]

According to the US Bureau of Labor Statistics, male unemployment increased sharply from 3.55 million in February to 11 million in April 2020, while female unemployment (lower than the pre-crisis men's) rose from 2.7 million to 11.5 million in the same period.[481]

In early May, a Washington Post-Ipsos poll revealed racial disparities between adult workers who were laid off or furloughed since the beginning of the outbreak: layoffs affected 20 percent of Hispanic workers, 16 percent of black workers, 11 percent of white workers, and 12 percent of workers of other races.[482]

Many workers were furloughed or laid off as a result of business and school closures and the cancellation of public events. During April more than 20 million Americans filed for unemployment insurance, an all-time record, and the national unemployment rate was reported as 14.7% – the highest monthly rate since record keeping was begun in 1948.[483] The rise in unemployment may have contributed to protracted nationwide civil unrest.[484][485]

For first quarter 2020, health care spending dropped 18 percent. 42,000 health care workers lost their jobs in March, and 1.4 million in April, as most hospitals postponed non-essential procedures. People who were left ended up doing the jobs of others who were furloughed.[486]

Although the United States government is the world's largest borrower, credit card debt in the country fell below $1 trillion in May 2020 for the first time since May 2011, declining for the previous three months. This was due to a decrease in both personal income and disposible personal income while personal savings rates nearly doubled. A job reports validated the decline after indicating that three million jobs were added in June 2020, compared to the 20 million jobs lost throughout the pandemic.[445][487][488][489][490]

In a Business Economics article that was published on 7 December 2020 and won NABE's 2020 Edmund A. Mennis Contributed Paper Award, Xiaobing Shu, Christine Chmura & James Stinchcomb claimed that "COVID-19 has caused a significant decline in labor demand, by as much as 30%, measured by the number of job advertisements. But the pandemic did not result in noticeable changes in advertised wages."[491]

In December 2020, economist David Choi at Goldman Sachs argued that the U.S. economy would recover faster than expected as impact on the parts of the economy most susceptible to the recent coronavirus spread weren't being affected as severely.[492] On the flipside, Alejandra Grindal at Ned Davis Research, argued that the economy could get worse if the pandemic worsens prior to the deployment of vaccines in Q2 2021, after which the economy would see "a pretty sharp recovery not only in U.S. economic activity, but also global economic activity".[493]

Nearly 20 million adults – 9 percent of all adults in the country – reported that their household sometimes or often didn't have enough to eat in the last seven days, according to Household Pulse Survey data collected 29 September – 11 October 2021. When asked why, 82 percent said they "couldn’t afford to buy more food," rather than (or in addition to) non-financial factors such as lack of transportation or safety concerns due to the pandemic.[494]

Even consumers with jobs have stopped spending. Retail sales plunged 20 percent from February to April, with very large declines in categories like clothing and accessory stores (down 89 percent) and department stores (down 45 percent). The personal saving rate jumped to 33 percent in March from 8 percent in February.[495]

Unemployment increased significantly in the United States during the COVID-19 pandemic. However, in the United States, most enterprises that adopted advanced digital technologies were able to avert worker reductions more significantly than firms who did not digitally adapt.[496][391][392][393]

Latin American and Caribbean countries were already facing low economic growth before COVID-19, with the region averaging 0.4% of growth in 2019, due to what was described as "a vicious circle of low-quality jobs, deficient social protection and volatile incomes" with one out of five in the ages of 14–25 being unable to find a job. The economic impact caused by COVID-19 was exarcebated by many countries' lack of reserve funds for times of crisis. Between 35 and 50 million people in the region are expected to fall below the poverty line, which is set at US$5.60 per day. Exports have also been affected and many countries are expected to fall further into debt.[497] The LAC region is experiencing the biggest contraction in the emerging markets and developing economies. The IMF World Economic Outlook has reported a GDP contraction of 8.1 per cent in Latin America in 2020. Unfortunately, since 2014, the region has been experiencing the weakest period of growth since 1950.[498]

On 19 March, Argentina entered a nationwide lockdown. The Argentine government announced the extension of the lockdown, originally intended to end on 31 March until mid-April. On 10 April, President Alberto Fernández announced that the lockdown would be extended in major cities until 26 April.[499]

In response to the economic halt, on 24 March, the executive decreed the payment of a one-time welfare benefit to the lowest earning self-employed taxpayers left with no sources of income in their household.[500]

On 22 September, official reports showed a record 19% year-on-year drop in the GDP for the second quarter of 2020, the biggest drop in the country's history.[501][502] Investment fell 38% from the previous year.[501][502]

Two Brazilian banks predicted the deceleration of economic growth in China. UBS has reviewed its estimations from 6% to 5.9%, while Itaú stated a reduction to 5.8%.[503]

A representative of some of the bigger Brazilian companies of the electronics sector, Eletros, stated that the current stock for the supply of components is enough for around 10 to 15 days.[503]

The prices of soybeans, oil, and iron ore have been falling. These three goods represent 30%, 24% and 21% of the Brazilian exports to China, respectively.[503][504][505]

Aiding Chile's downfall is reduced demand for copper from the US and China due to COVID-19.[506]

Prior to the pandemic, average public debt in Africa was predicted to progressively drop. Instead, average net government debt increased by 2 percentage points in 2020, reaching 61% GDP. The surge in Sub-Saharan Africa was significantly greater, with over 6 percentage points on average. Countries are suffering increasing debt payment expenses as a result of this rising debt burden. Some countries have lost complete access to the global markets thus becoming reliant on relatively limited internal resources and concessional finance.[507][508][509]

Microfinance services are provided by commercial banks, commercial and regulatory microfinance institutions, informal providers, and non-governmental organizations. One of the responses of Africa's microfinance institutions to the COVID-19 crisis was to increase reliance on digital channels to support borrowers.[510][511]

The European Investment Bank, with the help of the Making Finance Work for Africa Partnership (MFW4A), conducted the Banking in Africa survey in early 2021. 78 banks in Sub-Saharan Africa were surveyed. The banks that took part control nearly 30% of the continent's assets. The results showed that almost two-thirds of the Banks surveyed tightened lending rules in 2020 – 2021. More than 80% expanded their restructuring or loan moratoriums.[507]

According to the European Investment Bank's Banking in Africa study 2021, digital offerings by Sub-Saharan African banks are increasing, especially as a result of the COVID-19 pandemic. The majority of the banks polled said that the pandemic has accelerated the speed of digital transformation, and that this change is permanent.[507] 89% of the banks polled claimed that the pandemic has hastened the digital transformation of their internal operations; the same percentage believes that the consumer movement toward digital channels will continue once the virus has ended. Few banks were required to modify their employee levels, while slightly under one-third adjusted their prices. Approximately half of the answering banks had employed guarantees, the majority of which came from the central bank, the government, or an international financial institution. During the first half of 2020, the cost of overseas borrowing climbed dramatically. However, at the beginning of the pandemic, banks were well capitalized, thus they were able to resist liquidity challenges.[507]

Around 88% of enterprises in countries where COVID-19 follow-up surveys were conducted (three in Southern Africa, one in East Africa, four in West Africa, and one in North Africa) were suffering diminished liquidity, with more than 55% of them closing temporarily during the COVID-19 pandemic. Almost 8% had declared bankruptcy, and 26% of enterprises are past due on financial institution commitments. Firms that depend on equity are at 36%. rather than depending on commercial bank loans to address cash flow issues, these are more likely to succeed at 16%.[507]

The International Monetary Fund predicts that average growth in the African continent would return to 4.5% in 2021 and 4.0% in 2022. All economies except the Comoros are expected to increase in 2021. However, large differences in growth rates are expected, between 0.2% in the Republic of the Congo and 7.6% in Kenya in 2021.[507][512]

Australia is expected to be heavily affected by the epidemic, with early estimations have GDP contracting by 0.2% to 0.5%[513][514] and more than 20,000 Australian jobs being lost.[515] The Australian Treasurer, Josh Frydenberg said that the country would no longer be able to promise a budget surplus due to the outbreak.[516] The Australian dollar dropped to its lowest value since the Great Recession.[517]

The Australasian College for Emergency Medicine called for a calm and a fact-based response to the epidemic, asking people to avoid racism, "panic and division" and the spread of misinformation.[518] A large amount of protective face masks were purchased by foreign and domestic buyers, which has sparked a nationwide face masks shortage.[519] In response to price increases of nearly 2000%, the Pharmaceutical Society of Australia has called on these "unethical suppliers" to keep supplies affordable.[519]

Tourism bodies have suggested that the total economic cost to the sector, as of 11 February 2020, would be A$4.5 billion. Casino earnings are expected to fall.[520] At least two localities in Australia, Cairns and the Gold Coast, have reported already lost earnings of more that $600 million.[521] The Australian Tourism Industry Council (ATIC) called on the Government of Australia for financial support especially in light of the large number of small businesses affected.[522]

Mining companies are thought to be highly exposed to the outbreak, since sales to China constitute 93% of the sales of Fortescue Metals, 55% of the sales of BHP, and 45% of the sales of Rio Tinto.[520] The iron ore shipping gauge dropped 99.9% as a result of the outbreak,[523] and the virus has made shipping and logistic operations of mining companies more complicated.[524]

Agriculture is also experiencing negative effects from the outbreak,[525] including the Australian dairy industry,[526] fishing industry,[527] wine producers,[528] and meat producers.[514] On 13 February 2020, Rabobank, which specialises in agricultural banking, warned that the agricultural sector had eight weeks for the coronavirus to be contained before facing major losses.[529] Exports were also affected by the outbreak. In May, China—which is Australia's largest trading partner—stopped accepting Australian meat and placed tariffs on Australian barley, likely a punitive response to Australia's call for an investigation into the origin of the global pandemic.[530]

The education sector is expected to suffer a US$5 billion loss according to an early government estimate,[531][532] including costs due to "tuition fee refunds, free deferral of study, realignment of teaching calendars and student accommodation costs."[533] The taxpayer is likely to be required to cover the shortfall in education budgets.[534] An estimated 100,000 students were not able to enroll at the start of the semester.[535] Nearly two-thirds of Chinese students were forced to remain overseas due to visa restrictions on travellers from mainland China.[536] Salvatore Babones, associate professor at the University of Sydney, stated that "Australia will remain an attractive study destination for Chinese students, but it may take several years for Chinese student numbers to recover".[533]