#1 Economies are struggling with rising unemployment and the world is witnessing an increase in extreme poverty
Business closures and lockdowns have resulted in working-hour losses. According to the International labour Office (ILO), working- hour losses were equivalent to 255 million full-time jobs lost in 2020. Loss in working hours was four times that of the 2009 global financial crisis. As of January 2021, employment losses were highest in North and South America, and lowest in Europe and Central Asia. Unemployment globally has led to a rise in extreme poverty. It is estimated that the pandemic has pushed around 115 million people into extreme poverty.
#2 Global public debt soars to an all-time high
According to the IMF’s October 2020 World Economic Outlook, government measures to sustain the pandemic’s economic effects totalled USD 12 trillion, which represents 12% of global GDP. Government debt has been soaring throughout 2020 to sustain these measures. As per the IMF April 2021 update, European Union countries showed the largest gross debt of over 90% of GDP in 2020, an increase of 10% compared to 2019, and is expected to continue to be the highest till 2026. Moreover, global debt was at 98% of GDP at the end of 2020, compared to 84% for the same period in 2019.
#3 Localisation and diversification of global supply chains
Border closures and shipment delays as a result of the pandemic have disrupted the supply of goods and services to firms. Global trade has thus led to supply chains becoming more localised as a response to rising trade costs and increasing trade uncertainties. Economies are trying to boost local production to satisfy domestic demand, in turn ensuring fewer disruptions to the supply chain and limiting the movement of goods and people. For example, a survey in Southern Africa revealed that supply chain disruptions occurring between April and July 2020, resulted in a 58% shortage of supplies. Firms were thus forced to look for local alternative suppliers, with 55% of survey respondents finding new local suppliers. Manufacturers are also continuously diversifying sourcing by shifting focus to ‘closer-to-home’ partners (called ‘onshoring’) or other regional substitutes.
#4 Rise of digitalisation and e-commerce
Due to mobility restrictions, a majority of consumer interactions have shifted to online shopping. Digitisation has bridged the gaps of social distancing measures with new digital tools and technologies. Remote work, adopting new platforms to deliver services, digital healthcare and digital content consumption has kept societies and businesses afloat during the pandemic. With shoppers staying home, traditional retail has seen unprecedented falls thus giving rise to online shopping. E-commerce revenues stood at USD 2.5 trillion globally in 2020, as compared to USD 1.9 trillion in 2019.
#5 Vaccines rollouts, and the growing role and prominence for developing countries
Amid the COVID-19 pandemic, vaccines were developed at a record speed. As of 5 April 2021, there were already 13 approved vaccines, 291 ongoing trials, and around 104 vaccine candidates.