COVID-19 Pandemic Impact on Global Economy 5 Years later

Context: Five years after the World Health Organization declared the COVID-19 outbreak a pandemic, its impact on the global economy remains significant.

Impacts of COVID-19 Pandemic 5 Years Later

Debt and Inflation

• Global government debt has increased by 12 percentage points since 2020, with larger rises in emerging markets.
• Inflation spiked due to post-lockdown spending, government stimulus, and supply chain disruptions, peaking in 2022.
• Central banks raised interest rates to control inflation, but financial conditions tightened.
• Average global sovereign credit scores remain a quarter of a notch lower than pre-pandemic levels, while emerging market ratings remain half a notch lower.

Labour Market and Travel Shifts

• Millions of job losses, with women and poorer households worst affected.
• Shift in employment towards sectors like hospitality and logistics.
• Women’s workforce participation initially declined but the gender employment gap has slightly narrowed.
• The airline sector suffered $175 billion in losses in 2020 but is expected to post a $36.6 billion net profit in 2025 with a record 2 billion passengers.
• Hotel prices remain above 2019 levels, especially in Oceania, North America, Latin America, and Europe.
• Remote work has led to record-high office vacancy rates.

Digital Transformation

• Online shopping increased significantly during lockdowns, stabilising at higher levels post-pandemic.
• Physical retail space in Europe increased by 1% from 2022 to 2023 and is projected to grow by 7% by 2028.
• Shares in delivery and digital firms surged during the pandemic, with some retaining long-term gains.
• Retail investment increased, with 27% of total U.S. equity trading coming from retail investors in December 2020.
• Platforms like Robinhood gained prominence during the retail trading boom.

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