The COVID-19 pandemic has had far-reaching economic consequences beyond the spread of the disease itself and efforts to quarantine it. As the SARS-CoV-2 virus has spread around the globe, concerns have shifted from supply-side manufacturing issues to decreased business in the services sector.
[1] The pandemic caused the 2nd largest global recession in history, with more than a third of the global population at the time being placed on lockdown.[2]
During the earlier stage of the pandemic, supply shortages were expected to affect a number of sectors due to panic buying, increased usage of goods to fight the pandemic, and disruption to factories and logistics in mainland China. There have been instances of price gouging.
[3] There have been widespread reports of shortages of pharmaceuticals
[4] with many areas seeing panic buying and consequent shortages of food and other essential grocery items.[5][6][7] The technology industry, in particular, has been warning about delays to shipments of electronic goods.[8][needs update]
Global stock markets fell on 24 February 2020 due to a significant rise in the number of COVID-19 cases outside mainland China.[9][10][11] By 28 February 2020, stock markets worldwide realized their largest single-week declines since the financial crisis of 2007–2008.[12][13][14] This culminated in the 2020 stock market crash.
Possible instability generated by an outbreak and associated behavioural changes could result in temporary food shortages, price spikes, and disruption to markets. Such price rises would be felt most by vulnerable populations who depend on markets for their food as well as those already depending on humanitarian assistance to maintain their livelihoods and food access. As observed in the 2007–2008 world food price crisis, the additional inflationary effect of protectionist policies through import tariffs and export bans could cause a significant increase in the number of people facing severe food insecurity worldwide.[15]
Many fashion, sport, and technology events have been canceled or have changed to be online.[16][17] While the monetary impact on the travel and trade industry is yet to be estimated, it is likely to be in the billions and increasing.
Amidst the recovery and containment, the world economic system is characterized as experiencing significant, broad uncertainty. Economic forecasts and consensus among macroeconomics experts show significant disagreement on the overall extent, long-term effects and projected recovery.[18] Risk assessments and contingency plans therefore must be taken with a grain of salt, given that there is a wide divergence of opinion. The record-high energy prices were driven by a global surge in demand as the world quit the economic recession caused by COVID-19, particularly due to strong energy demand in Asia.[19