Before COVID 19, everything seemed fine. For money parts of the world, the economy was booming. People had jobs and spent money. Many left their houses with the intention to spend almost every day. We are not seeing those kinds of numbers anymore.
In January, COVID-19 seemed like it would stay in China. We would be okay and unaffected. By March, we realized this was not the case. Everything shut down. People had to stay inside their homes to be safe and lonely leave for the necessities. As we stayed home, we kept others safe, but a new growing worry emerged. What was happening to the economy?
What Happened in March
When we went home, we were worried about a deadly virus. Then, in addition to this, we had to worry about job loss and the overall economy.
We have a reason to worry. The GDP, a primary market health indicator, has fallen by 19.5% in a single month. To put it in perspective, during the entire great recession the GDP fell by 6%. That means that our GDP loss is triple that of the great recession and is worse even than the great depression.
Our hopes for a speedy recovery
At the end of June, just before England exited lockdown, many economists were predicting a V-shaped recovery. They had gone down, and now they would be going back up. Even before the lockdown eased, GDP was rising by 5.9% per month. As things began to open up and the summer weather encouraged people to come out of their homes, we had hope. Things could go on to be the same way as they were before the coronavirus. We did not have to worry about another great depression (that would be worse than its predecessor). By October 2020, things were still looking up. We were just 7.9% shy of where we had been in February. That may seem like a lot, and it truly is, but it a remarkable recovery for what we had been going through. Just as our hopes seemed to be coming up though, everything came crashing down.
A New Strand Of COVID-19…and a new lockdown
Just when we thought we were clear, with a new tier system to guide us in reopening, the weather turned cold. A new wave of COVID cases came in, made worse by the cold weather. We have to slowly regress in reopening, and then we had to stop altogether. Just when we thought it could not get any worse a new, more infectious strand of COVID was discovered, send us into tier four of our three-tier lockdown plan?
What does this mean for the economy?
Our dreams of a V-shaped recovery have been dashed. In fact, economists are providing us with some brutal news. The economy is set to shrink more in 2021 then it has in the past 300 years. Our quick summertime recovery suggested a more W-shaped return of the economy, but many are now predicting a U-shape of it getting worse before getting better.