Economic & Social Impacts of COVID
22nd February, 2021

The Covid-19 pandemic has caused immense changes to the world as we know it, affecting near enough every aspect of life, from work and education, meeting family and shopping for food, to the lasting effects on mental health.

As well as our personal lives, the international Covid-19 lockdowns have forced us to assess how our economic, political, and social systems function, from stark differences between national and private healthcare systems and highlighting the importance of globalised supply chains to how much the UK relies on these processes.

Economic impact

Real gross domestic product (GDP) increased by 1.2% in December 2020, during a period of eased restrictions early in the month, although revised 2.3% decline came shortly after- during more restrictions to activity. Despite this slight increase at the beginning of the month, December GDP is 6.3% lower than the levels seen in February 2020.

But what exactly does this information mean, and what effect does it have on our economy?

Well, when GDP rises, the economy is generally thought to be affluent.

Growth in the economy is important for everyone- individuals, businesses, charities, and the government. However negative growth signals, like what the UK is currently experiencing, signifies falling incomes, job cuts and lower consumption.

Recession is defined when a country has experienced two consecutive quarters of economic decline, much like what the UK experienced during the first two quarters of 2020, making it the worst recession of record, and the first in the UK since 2009.

Overall, GDP in 2020 dropped by 9.9%. In addition to this being the first sighting of recession since the 2009 financial crisis, the UK has not actually experienced this level of recession since the Great Frost of 1709, where the economy shrank by a shocking 13%. Even after the first world war, Covid-19 surpasses the 9.7% drop we experienced in 1926.

From July to September however, when restrictions were eased, and putting money back into the economy was encouraged. The UK experienced the fastest three-month growth on record at 15.5%. During this time, our economy was closest to figures from 2019, although the UK economy was still far from pre-Covid levels.

To put this into perspective against other countries; the UK economy is 9.7% smaller than before the crisis, France is 4.1% down, Germany is 4.2% down, Spain is 9.1% down and the US is doing relatively well, at 3.5% smaller. 

The economic fallout from Covid-19 will have a lasting impact on the world as we know it. The UK has a long road to recovery ahead of us, and despite the hope that the economy will bounce back quickly due to consumer-fuelled growth, we are most likely set for a slow return to the economic size as we know it. According to a poll of more than 90 economics, featured on the Financial Times, it is predicted that it wont be until the third quarter of 2022 that UK GDP will recover.

Social impact

Covid-19 will have an unmeasurable effect on our society. With the implications stemming from much deeper issues than simply fear of infection or disruption to regular life.

Current studies have highlighted the impacts on some of the most vulnerable groups, who are most likely to develop post traumatic stress disorder, depression, anxiety, and various symptoms of distress.

Data from these studies such as those collected on a sample of college students at the time of the spread of the virus in China showed how anxiety levels in young adults are mediated by certain protective factors, such as living in urban areas, the economic stability of the family, and cohabitation with parents. Whereas young children were reported to experience symptoms such as boredom, difficulty concentrating, irritability and nervousness.

The effect of the pandemic on health workers of course, includes the above symptoms, as well as the burden of experiencing the virus first-hand- handling their own and their family’s safety, whilst still carrying out the life-saving and critical work that they have done around the world since the beginning of the pandemic. Healthcare workers have been subject to the risk of developing symptoms common in catastrophic situations, such as post-traumatic stress disorder, burnout syndrome, physical and emotional exhaustion, depersonalisation, and dissociation.

The current situation certainly raises the question as to how, and when society will recover from Covid-19, with fears that we will never fully recover. The truth being, that nobody knows the answer as to how we can overcome this. However, we are all constantly finding small sheds of hope on coping with the pandemic, with technology progression playing a huge role in maintaining communication with others and supporting day-to-day activities. Applications such as Teams and Zoom have been instrumental in injecting a sense of normalcy into our lives.

Alongside technology, now more than ever, people have been relying on remarkable organisations who have managed to continue supporting individuals all over the world. Mind, the UK charity dedicated to providing advice to anyone experiencing mental challenges, is available to support anyone who may be struggling with Covid-19 worries, such as wellbeing for yourself and family, anxiety about work, and how to adapt to the changes in the world right now.

The Dalai Lama is a world-renowned public figure, the 14th Dalai Lama, and the highest spiritual leader of Tibet. A statue for spiritual ease and peace of mind, he has written dozens of books which speak to his moral, and unimpeachable character, and often viewed as a person to admire during the pandemic.

When the question was asked; how can humanity pull together in these times?  The Dalai Lamas simple answer encapsulates how the world shall begin to recover:

‘As human beings, we all share the same sorrows, the same hopes, the same potential. The Covid-19 pandemic has reminded us how interdependent we are: what happens to one person can soon affect many others, even on the far side of our planet.

Therefore, it is up to all of us to try to cultivate peace of mind and to think about what we can do for others, including those that we never see. It is natural to feel worry and fear at a time when so many are suffering. But only by developing calmness and clear-sightedness can we help others and, in so doing, even help ourselves. In my own life, I have often found that it is the most difficult challenges that have helped me gain strength.

The current global health crisis also reminds us that what affects the human family must be addressed by all of us. The solution to this, as to many other problems, especially concerning the environment, depends on international co-operation. Ultimately, if humanity is to thrive, we must remember that we are one.’

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