Due to the worldwide coronavirus pandemic, distancing and self-quarantine measures have been taken among many countries across the world.
However, these social distancing measures have a significant global economic and business impact. Three major economic channels are being affected:
- Labour supply is reduced globally due to workplace restrictions and quarantine measures.
- Demand and supply are reduced in certain sectors such as tourism and recreation, retail, manufacturing.
- Trade costs would increase as a result of tighter travel and border control and rising transportation fees.
The global economy has suffered a substantial slowdown due to the coronavirus, with nearly universal impacts across industries. The effects of the coronavirus pandemic are visible in the following statistics:
- Labour supply is expected to decrease by 86% globally in 2020. This takes into account morbidity and mortality, school closures, and working from home.
- The 2020 global real GDP is expected to decrease by -4.8% to -11.1%, while the 2021 global real GDP is projected to increase by 2.8% to 8.1%. These changes are relative to a non-pandemic benchmark.
- The trade-weighted average percentage change in ad valorem trade costs is expected to increase by 4% in 2020 by channel and exporting region.
- Global real exports are expected to decrease by -8.1% to -20.4% in 2020, while in 2021 they are projected to increase by 5.8% to 13.6%. These changes are relative to a non-pandemic benchmark.
In light of the current and future effects of the novel coronavirus pandemic on businesses, here are some steps ,businesses and enterprises should take to mitigate the business impact of COVID-19:
- Identify your critical products and suppliers.
- Develop a business continuity plan and act on it.
- Consider the financial and legal implications.
- Generate awareness of the plan in your company by communicating its timeline and practices.
- Conduct business impact analysis for different scenarios.
Smaller businesses should take the following steps to ensure business continuity during the coronavirus pandemic:
- Protect your employees with health and safety measures.
- Set up a cross-functional COVID-19 response team.
- Ensure that liquidity is sufficient to weather the storm.
- Stabilize and protect your supply chain.
- Stay close to your customers.
- Practice your business continuity plan.
- Demonstrate purpose.
Read more on how your business can and should respond to the impact of COVID-19 below：
- Responding to the business impacts of coronavirus (COVID-19)
- Building business resilience in response to Covid-19
- Seven key actions business can take to mitigate the effects of COVID-19
- Navigating your COVID-19 response
- Enterprise resiliency: nine areas of focus for COVID-19 crisis management
- COVID-19: Protecting your supply chain
For more details on the global economic impact of coronavirus, read more using the links below:
- Statista: Impact of the coronavirus pandemic on the global economy – Statistics & Facts
- WTO: METHODOLOGY FOR THE WTO TRADE FORECAST OF APRIL 8 2020
- Statista: Forecasted global real Gross Domestic Product (GDP) growth due to the coronavirus (COVID-19), from 2019 to 2021
- PreventionWeb: The growing impact of coronavirus on the global economy
- WTO: Trade set to plunge as COVID-19 pandemic upends global economy
- WTO: 2020 Forecast Speech by WTO Director General Roberto Azevêdo