ACADEMIA DE STUDII ECONOMICE, BUCUREȘTI

Facultatea de Cibernetică, Statistică si Informatică Economică

Which economies have done best and worst during

the pandemic?

STUDENT: Ivan Andra- Ioana

SPECIALIZAREA: Informatică economică

AN DE STUDIU: I

GRUPA: 1017

SERIA: D

AN UNIVERSITAR: 2020-2021
 Which economies have done best and worst during the pandemic?

I. Introduction

The year 2020 has been hard for all of us. Dealing with the unforeseen challenges caused by
the COVID-19 pandemic has taken a significant toll on people all across the world. The
economic and social disruption caused by the pandemic is devastating: tens of millions of
people are at risk of falling into extreme poverty, people all over the world are forced to
contend with a new normal: lockdowns, mask rules, economic crises and travel bans. Many
fell ill with the novel coronavirus or lost loved ones because of it, and millions of other people
lost their jobs. But even with the pandemic as an omnipresent backdrop, life went on.
Countries held elections. Protesters took to the streets. Wars broke out. Besides its worrying
effects on human life, coronavirus (COVID-19) has the potential to significantly slowdown
the global economy.
Accordingly, I have chosen to analyse the speed of the economic bounce-back from the
enormous recession of 2020 that had created those differences between the many fields of
economics during a global pandemic, explained in the article called “Which economies have
done best and worst during the pandemic?” written for The Economist, because i was
impressed by the economic impact over the world and how every country decided to mitigate
these issues. In this essay, I will go into detail about the winners and the losers that the
pandemic created in the field of economics and about the dispersion between them that is
going to persist in 2022.
The main idea of the article is that, during the pandemic, the economy was influenced in
many ways and some of the economies had ups and downs; a part of them were noticed and
scored as the best, protecting their population’s health while also protecting the economy,
when, at the same time, others were shown as doing their worst, Large domains of the
economy ground to a halt. Because this pandemic is global, the repercussions have been felt
globally as well.

II. Main body

1. Paragraph 1
a. The author starts by explaining that the speed of the economic bounce-back from the
recession of 2020 has taken by surprise so many forecasters. He explains that the production
from the 38 countries of OECD exceeded its pre-pandemic level a few months ago, the
average unemployment rates across the club is in a match with the post-war and aggregate
household income is over its line before the pandemic, facts that created losers and winners in
the field of economy; overall, the integral picture has been so benevolent, hiding major
differences.
b. I believe that the explanations of the author are accurate because he made a clear analysis
of the production of OECD countries, reaching some authentic results that reflect the impact
of coronavirus over the economy of those countries.
c. Some analysts consider that the economic impact of coronavirus continues to surprise: the
initial bounce back was far stronger and sooner than expected, and some sectors of the U.S.
and other economies have seen complete recoveries to pre-crisis levels of activity. While the
stronger-than-expected recovery aligns with the business experience of many leaders they
speak with, they still wonder what drove the gap between expectations and reality and
whether it can last.

2. Paragraph 2 & 3
a. To estimate the differences between those economies, the author collected data on five
economic and financial indicators: GDP, household incomes, stock market performance,
capital spending and government indebtedness for some rich countries, and created an overall
score where the discrepancies can be seen among the economies; some countries are faring
better than they were before the pandemic on almost every measure, while others remain in
the economic chasms. The author shows the change in headline GDP since the end of 2019,
offering an image of economic health. In his opinion, some countries like those from southern
Europe seemed unsafe to travel bans and a collapse in services spending, while others endured
high levels of coronavirus infections and deaths, limiting consumer spending.
b. In my opinion, I think that creating an overall score was necessary for showing the ups and
downs of every economy; by evaluating these discepancies, leaders can take measures to
remediate the problems and create a balance among every field. I believe that the travel bans
were implemented with a purpose – to not spread the virus – but, at the same time, this fact
made the tourism sector fall apart.
c. The analysts explain that the closure of borders worldwide took a heavy tool on travel
services and the industries that directly and indirectly serve the travel and tourism sectors,
ultimately lowering regional GDP’s. According to the World Travel and Tourism Council,
global spending on travel and tourism nearly halved in 2020. Millions of jobs were lost in
travel, tourism, and adjacent sectors as businesses attempted to cope with the sudden halt in
activity.

3. Paragraph 4
a. The author is presenting a completion of the image about how the families managed the
cruel situation. Their income is constitued not just of employment but also handouts from
governments. He articulated that his measure is setteling for reduced purchasing power as a
result of recent surges in inflation.
b. I think that the covid-19 crisis will not affect all families equally; in this situation, many
may not be knowing how to manage everything, with factors, such as their income, being out
of their hands.
c. What really makes families more financially resilient in the face of volatility is having a
liquid cash buffer. In general, the specialists estimate that families need roughly six weeks of
take-home income in savings to weather a simultaneous income dip and expenditure spike.
Overall, 65 percent of families lack a sufficient cash buffer to weather this event. Families
with larger cash buffers are more resilient in the face of income volatility: they cut their
everyday spending less when they experience a drop in earnings or lose their job entirely.
Moreover, they are less likely to default on their mortgage after a negative income shock.

4. Paragraph 5
a. In the countries where the virus didn’t have a high infection rate, labour markets suffered
big changes, the author explains. He makes a comparison between Japan where the
unemployment rate did suffer and the rate of Spain, which has grown considerably.
b. I believe that the pandemic hit differently on labour markets because, since everything has
been closed, people lost their jobs and the crisis began to surface.
c. The impact of the covid-19 crisis on labour markets across the OECD has been profound,
explain the specialists. In April 2020, following the onset of the crisis, the OECD
unemployment rate saw an unprecedented 3 percentage point increase to reach 8.8% – the
highest unemployment rate seen in a decade.

5.Paragraph 6
a. In this paragraph the author explains how some governments sent vast amounts of money to
people. States like the US and Canada offered unemployment benefits. The Baltic countries
focused more on protecting firms or expanding health-care capacity.
b. I think it is very important for countries to invest in their health-care systems and I agree
with what the author said: it is important to expand the health-care capacity because the
coronavirus is not going to pass that easily and the good physical condition of people is of
utmost importance. Of course, it is also important to offer unemployment benefits since lot
people are losing their jobs, finding themselves in need of financial support.
c. The analysts explain that health systems continue to adapt in order to cope with the
covid-19 pandemic. Much focus has been placed on the scaling-up of hospital capacities.
Moreover, they think that the smartest businesses don’t just manage risk during the
pandemic, but they also use it as a source of accelerated growth and market edge.

5. Paragraph 7
a. The author presents here the situation of companies which are passing through a difficult
period. Stockmarket performance shows their health and the attractiveness to foreign
investors. He explains that share prices in Britain were bigger on the eve of the pandemic
than today and the country owns fewer technology companies than America, fact that register
a stock market bounce.
b. In my opinion, I firmly believe that during the pandemic companies went through difficult
times. The stock market definitely took its toll on their situation as high volatility present in
certain sectors scared off investors.
c. The research explains that changes in share prices reflect market expectations about a
number of effects, including: changes in final demand, changes in intermediate demand and
restrictions in supply (it may be difficult for some firms to obtain inputs they need due, for
example, to interruptions to their supply chain).

6. Paragraph 8
a. The author explains in this paragraph the situation of capital spending which reflects the
optimism for the future. During the pandemic new job opportunities were implemented and
people were working from home resulting in companies spending a lot of money on
technologies that makes this activity more efficient.
b. I believe that during the pandemic companies went through difficult times forcing them to
adapt to new situations. However, they found quick solutions to maintain their performance.
c. The analysts are saying that the businesses were fast to adapt to the new normal while
others have not been so effective in their transition. According to analysis, 70% of small
business owners were concerned about surviving the pandemic due to prolonged closures
while 58% worry about having to permanently close.

a. Paragraph 9
a. In this paragraph, the author presents the last indicator: public indebtedness, explaining
that some countries could meet potentially larger tax increases and spending cuts in the future
due to a big rise in government debt.
b. I believe that public indebtedness depends on each country and during the pandemic it
suffered different changes which affected the population.
c. The analysts presents a major blow, the rise in debt being exceptional in size, speed, and
scope. The public sector will absorb the bulk of the increase due to its capacity to borrow
more and under better conditions (lower interest rates and longer maturities). This borrowing
scheme will push public debt up to almost unprecedented levels.

III. Conclusions
Considering the aspects listed above, during the pandemic, the economy greeted ups and
downs in every domain creating winners and losers. However, the recovery of the economy is
not stopping here because the spread of Omicron variant is likely to persist in 2022 shaping
the world of the future. The bad news are hitting differently now because by the end of the
next year OECD expects the combined GDP of the three highest-ranked countries to be 5%
higher than its pre-pandemic level, while for the three worst-ranked countries it is expected to
be 1% higher than it was before coronavirus. Still, nominal GDP values denominated in a
common currency are a way of measuring and comparing economic sizes of different
countries and provide a glimpse of how developments, such as the pandemic, affect
economies differently. The covid-19 pandemic has shaken up the ranking of the world’s
largest economies after sending many countries into their worst economic recessions in recent
history.