How Covid-19 affected the global economy

Amid the coronavirus pandemic, lockdowns were resorted to by several countries around the world to "flatten the curve" of the infection. These lockdowns meant that millions of citizens were confined to their homes, that businesses were shut down and almost all economic activity ceased. The global economy is expected to shrink by more than 3 % in 2020 – the steepest slowdown since the Great Depression of the 1930s, according to the International Monetary Fund ( IMF).

Now that some countries are lifting restrictions and gradually restarting their economies, here is a look at how they have been affected by the pandemic and how they have coped..

The pandemic has pushed the global economy into a recession, meaning the economy is beginning to shrink and growth is stopping.

In the US, disruptions associated with Covid-19 have led to millions filing for unemployment benefits. The figures were at 20.5 million in April 2020 alone, and are expected to rise as the pandemic 's impact on the US labor market worsens. More than 36 million people have filed for unemployment benefits since 21 March 2020, which is nearly a quarter of the working-age population.

The global economy 's estimate of -3 per cent growth by the IMF in 2020 is a "far worse" outcome than the global financial crises of 2009. Economies like the US, Japan, UK, Germany , France , Italy and Spain are expected to contract 5.9, 5.2, 6.5, 7, 7.2, 9.1 and 8 per cent respectively this year.

Advanced economies have been hit harder and are expected to grow together by -6 per cent in 2020. Emerging and developing markets are expected to contract by -1 per cent. If China is excluded from this pool of countries, the growth rate is projected to be -2.2 per cent for 2020.

China's GDP fell by 36.6% in the first quarter of 2020, while South Korea 's output fell by 5.5%, as the country did not impose a lockdown but followed an aggressive testing, contact tracking and quarantining strategy.

France , Spain and Italy's GDPs in Europe fell by 21.3, 19.2 and 17.5 per cent , respectively.

Oil and natural gas

Global industrial activity has been affected due to the downturn in travel. Oil prices continued to decline in March as the transport section, which accounts for 60% of oil demand, was hit by several countries imposing lockdowns. Not only oil, earlier this year in China, as a result of Covid-19-related containment measures, demand for natural gas fell as a result of which many Chinese LNG buyers stopped importing as storage tanks filled.

Industrial Metal

The demand for industrial metals decreased as factories shut down due to lockdowns in China followed by in the US and Europe. China accounts for about half of global demand for industrial metals according to the IMF.

Food and beverages

In 2020, the IMF is planning a 2.6% reduction in food prices due to supply chain disruptions, border delays, food security concerns in Covid-19 affected regions and export restrictions.

During the lockdown period, while cereal, orange, seafood, and arabica coffee prices have increased, tea, meat, wool, and cotton prices have declined. In addition, the fall in oil prices has put downward pressure on palm oil, soy oil, sugar and corn prices.