Economic Losses Caused By COVID Are Having Devastating Effects

 Due to the pandemic outbreak, global gross domestic product declined by 6.7 percent in 2020.
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Photos: Unsplashed\Claudia Jeffrey

The outburst of COVID-19, which is marked as a “black swan” event - had a devastating effect, not only on the health of the people, but also affected the economic condition of the world. Its outcome is severe and widespread and will be felt for a long time.

Source: Unsplashed

To mitigate the impact of the virus, the governments of most countries announced a strict lockdown at national and international levels. As a result, this impact of shock and long-term damage has dealt a blow to the prospect of growth. Due to the pandemic outbreak, global gross domestic product declined by 6.7 percent in 2020.

How Covid-19 Transformed The World Economy

As the pandemic reached almost every country in the world, it left its mark on almost every sector. Therefore, markets of the world’s largest economic countries or industries went through the fear of distribution of the global financial market.

1. Impact Of COVID-19 On The Stock Exchange

February 19, 2020, marked the stock market climax. The world changed from transforming our lives, our economies, or the fortune of our business, and an unpredictable journey was reflected through ups and downs in the share price of various industries.

Source: Corporate Performance Analytics

According to the research, due to the global pandemic, in March 2020, almost all the major stock market indices fall sharply. Both, the extent of the decline, and the shape of the subsequent recovery, varied greatly at that time.

Being exact, on March 15, 2020, traditional stocks in the United States and most of the major European markets shed around 40 percent of their value as compared to January 5, 2020. However, NASDAQ Composite Index and Asian markets only shed around 20 to 25 percent of their value.

In the first month of the pandemic, we saw historically rapid fallout across all sectors. Recalling that, this pandemic was full of uncertainty. A reversal of change started to turn after the mid of March when the pharmaceutical or biotechnological department bore their loss. But many industries like traveling or oil and gas are still in crisis as compared to their pre-pandemic peak.

2. Poverty And Unemployment

Considering the spread of the pandemic in perspective, the unemployment rate has increased across major economies. In the starting month of the pandemic, about ten million people were forced to leave their job. Due to this reason, unemployment remained high throughout the end of 2021.

3. Coping With Health Issues

The outbreak of the disease has put an additional burden on the health care system, as the facilities are inadequate to meet the public demand.

Source: Unsplashed

The major concern of the pandemic was the lack of beds for the patients. The lockdown and restriction due to the disrupted supply of health care providers faced hurdles while addressing the COVID patients.

4. Oil Continues To Come Under Steep Pressure

Since March 2020, low oil prices were likely to provide the best initial support to growth restrictions to economic activity. COVID-19 pandemic and its measures, such as travel restrictions and the shutdown of non-essential activities, have caused severe economic turbulence. However, oil prices collapsed badly, recording the biggest monthly fall in March 2020. The oil price fell by 85 percent. This low price failed to give much buffer to the economy.

Effects Of Pandemic On Different Sectors Of The Society

To overcome the spread of the virus, unplanned lockdowns across the world had a disastrous effect on the economy. One year into the pandemic, almost all the world was affected by the shock.

This pandemic forced  various changes in the economy of the entire sector, society, and even the lives of the young ones.

A. Impact of COVID-19 ON Educational Sector

Source: Unsplashed

As there is a potential health threat from the virus, the school corporation decided to send their students back. Indeed, the urgency of dealing with this serious issue of the pandemic was pushed aside by a serious consideration of the long-term economic loss from the school closure.

These losses had a lasting effect, both on the affected students and the nation. Existing research suggests that most of the education sector faced problems in giving salaries to their employees. Various government examinations were postponed, due to which the production, supply, and demand of educational products were stopped. As a result, several employees were affected financially.

Source: Unsplashed

In addition, most of the students had to use mobile phones during their online classes, which resulted in losing their interest in online classes, and they sought help from various online websites like Assignment Assistance.

B. Impact Of Covid-19 On Travel And Tourism

Travel and Tourism is one of the most affected sectors by COVID-19. Most countries have imposed a lockdown at their borders to reduce the spreading of the virus. The closure of the domestic and international borders left its mark on the tourism sector.

Billions of dollars were left in 2020. It is predicted that international travel or tourism won’t be settled even by 2025. Export revenue from the tourism sector lost about $910 billion to $1.2 trillion. As a result of the consequences, millions of tourism jobs were at risk, and many had to suffer from unemployment. In addition, sectors associated with tourism, such as labor and food services industries that provide employment, were greatly affected too.

Talking particularly about Sri Lanka, tourism has traditionally been the third-largest foreign exchange earner in the country. Sri Lanka has earned 1.9 million from tourism as Sri Lanka sinks deeper into an economic crisis. The arrival of corona fell drastically, and there was no sign of recovery until November 2021. The country has grappled with the worst financial crisis due to the power cut, which plunged the country into darkness.

As a result of this energy crisis and food shortage, people are protesting and blocking the road. These circumstances sabotaged the country into bankruptcy.


This pandemic started in late December 2019 in Wuhan City. It started spreading in March 2020 and left its mark in every sector. When the number of cases started increasing rapidly in different regions of the world, strict lockdowns were enforced in almost all the countries.

This quarantine or lockdown policy has not only affected the health of the people around the world but also disrupted economic activities. Almost all the sectors and different industries faced tremendous losses during the covid season. Although the world is currently growing back, it will surely take more time to recover the losses.

Author Claudia Jeffrey is currently working as an Editor At Crowd Writer, where students seek academic writing services. Claudia helps them with their academic and professional careers. She loves to share her knowledge and expertise with the readers. She often blogs at Word Count Jet.

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