Outlook: How the pandemic ripped global economies
The Covid-19 pandemic caused unprecedented health and economic crisis last year as rollout of various containment measures instituted to mitigate infections negatively affected global trade.
According to Kenya’s 2021 Economic Survey released by the Treasury, globally real GDP contracted by 4.2 per cent in 2020 compared to a growth of 2.7 per cent in 2019.
“There was a significant decline in oil prices, and uncertainty in financial markets after the outbreak of the COVID-19 pandemic,” the report notes in part.
In the advanced economies, real GDP is estimated to have contracted by 5.8 per cent last year compared to a 1.7 per cent growth in the previous year.
Stringent COVID-19 curbs such as lockdowns and restriction of movements greatly affected economic activity in Euro area where the bloc’s economy contracted by 7.5 per cent compared to real GDP growth of 1.3 per cent in 2019.
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A slump in personal spending, exports and business investments in the US saw the economy decelerate by 3.7 per cent compared to a real GDP growth of 2.2 per cent in the previous year.
As activity in US restaurants, shopping malls and footfall into movie theatres slumped, the unemployment rate surged by 4.6 per cent during the year under review to stand at 8.1 per cent.
In the UK, weak business investment climate, subdued private consumption due to COVID-19 curbs and inflation pushed the economy to contract by 11.2 per cent last year compared to 1.3 per cent jump in 2019. This was the largest annual contraction since the great frost of 1709.
The survey says the emerging economies of Brazil, Russia, India, Indonesia, China and South Africa (BRIICS) recorded an average slump of 2.9 per cent last year compared to a real GDP growth rate of 3 per cent in 2019.
Despite being the first country to report COVID-19, China was the only country in the BRIICS that recorded a positive GDP growth of 2.3 per cent last year compared to an uptick of 6.1 per cent in the previous year.
Across Sub-Saharan Africa, the real GDP contracted by 1.9 per cent in the pandemic year compared to 3.2 per cent growth in 2019 owing to adverse effects on the tourism industry due to travel restrictions, muted international trade and the rising debt burden amid gloomy economic activities.
