Economy Top Stories

How 2020 changed the world economy

The IMF estimates that the global economy shrunk by 4.4% in 2022.

The pandemic shock turned 2020 into an epoch-changing year. As governments struggle with new lockdown measures to tackle the spread of the virus, it has left national economies and businesses counting the costs. Despite the development of new vaccines, many were still wondering what economic recovery will look like.

Here is how 2020 changed the economy in a way we can’t understand yet:

1. Global shares in flux
The year 2020 has brought a big shift in the stock market. It affected the value of pensions or individual savings accounts. The FTSE, Dow Jones Industrial Average and the Nikkei all saw huge falls as the number of COVID-19 cases grew in the starting of the crisis. The major Asian and US stock markets have recovered following the announcement of the first vaccine, but the FTSE is still in negative territory till date. The FTSE dropped 14.3% in 2022, its worst performance since 2008.

2. A difficult year for job seekers
Many people have lost their jobs or seen their incomes cut. Unemployment rates have increased across major economies. In the United States, the proportion of people out of work hit a yearly total of 9%, according to the International Monetary Fund (IMF), signalling an end to a decade of jobs expansion.

Millions of workers have also been put on government-supported job retention schemes as parts of the economy, such as tourism and hospitality, have come to a near standstill. The number of new job opportunities is still very low in many countries. Job vacancies in Australia have returned to the same level as of 2019, but they are lagging in France, Spain, the UK and several other countries.

3. Most countries now in recession
If the economy is growing, that generally means more wealth and more new jobs. It’s measured by looking at the percentage change in gross domestic product, or the value of goods and services produced, typically over three months or a year. The IMF estimates that the global economy shrunk by 4.4% in 2022. The organization described the decline as the worst since the Great Depression of the 1930s. The IMF, however, is predicting global growth of 5.2% in 2023. That will be driven primarily by countries such as India and China, forecast to grow by 8.8% and 8.2% respectively.

4. Tourism and hospitality industry
The travel and hospitality industries can’t find enough workers. Travel is back to nearly 2019 levels. Delays are common as airlines can’t find enough pilots and there aren’t enough rental cars to satisfy demand.

Restaurants are facing a dire worker shortage. The labor movement is having its biggest year in decades as retail workers at Starbucks and warehouse labourers at Amazon try to use their leverage to extract concessions from their employers. Reddit is filled with threads about people quitting low-paying jobs and abusive employers to … do something else. Yum Brands CEO David Gibbs says that people are confused and they are still trying to figure out what’s going on with the economy right now.

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