Agricultural Economics Department
Date of this Version
11-10-2021
Abstract
The Coronavirus pandemic has disrupted economic activities around the world. Many businesses had to cease operations and furlough or lay off their workers. The World Bank (2021) has reported that global economic output fell by 3.4% in 2020. The good news is that the massive infusion of financial support from many governments in high-income countries meant that the worst economic effects of the pandemic were mitigated, and a rapid recovery has begun to make up for the pandemic-related losses. The International Monetary Fund (IMF) predicts that the global economy will grow by 5.9% in 2021 recovering the 2020 losses and leaving the economy about 2.5% larger than it was in 2019 (IMF 2021). The rapid economic recovery has not been without a few setbacks. Savings accumulated during the year of inactivity are fueling increased demand for goods while supply-chain problems related to maritime and terrestrial transportation and distribution systems have led to price increases and shortages of some goods. The IMF (2021) predicts that these price increases will subside in 2022 but notes that threats stemming from the continued spread of Covid-19, particularly in low- and middle-income countries, remain.
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