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The Economic Consequences of the New Normal

Written by Contributor, on 29th Jun 2020. Posted in General

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The coronavirus, otherwise known as COVID-19 has had a massive impact on the way people live their lives around the world. Since the onset of the virus in January 2020, which quickly developed into a global pandemic, there have been massive interventions made by governments everywhere — with many restrictions placed on how people work and socialise in a bid to stop the spread. And while the restrictions on lifestyle have certainly been a difficult adjustment for many, there has also been a massive impact on the world economy as business struggle to stay afloat and react to the new normal. Infographics like the one below, via bestcasinosites.net, have shown the extent to which countries everywhere have been affected.

It has now been 12 weeks since the UK went into lockdown. Some restrictions seem to have been easing, with rumours that pubs and restaurants could be opening, with conditions, in the coming weeks. But there is still a while to go; and whether the UK and other places around the world will ever return to a pre-COVD-19 normal is anyone’s guess.

But to what extent has the UK been hit economically as a result of the virus? And what might a future normal look like as the months progress? Read on to find out more.

A heavy fall

According to a report by the Organisation for Economic Cooperation and Development, Britain’s economy is likely to suffer the worst damage from the COVID-19 pandemic than almost any other country in the developed world. The report shows a slump in the national income of the UK by 11.5% during 2020, which is estimated to outstrip the falls in the US, Germany, Italy, Spain and France.

Rishi Sunak, the UK chancellor said that the UK was suffering “in common with many other economies around the world” with the priority being to “support people, jobs and businesses through this crisis and this is what we’ve done.”

The government has been met with criticism by other MPs and the public for how they’ve handled the pandemic thus far. Labour’s shadow chancellor Anneliese Dodds attributed the “deeply worrying” OECD report on the government’s “failure to get on top of the health crisis, delay going into lockdown and chaotic mismanagement of the exit from lockdown” which she says has contributed to the breakdown of the economy.

There have been some hopeful reports since several lockdown measures have been lifted as the country moves from a level 4 to a level 3 alert level. Non-essential shops have now opened for business and many other businesses across industries including hospitality, beauty and more are keeping optimistic that they’ll be able to open their doors from July 4th.

Andrew Bailey, the bank of England governor, suggested that he could see some early signs of economic recovery as restrictions eased, but that there would likely be some long-term damage. “If there is any such thing as a normal recession… this one will be different. There will be elements of a faster recovery, because the first stage of the recovery is literally lifting restrictions and allowing people to go out,” he said. “We don’t know how much scarring there will be. I think it is reasonable to say that there will be some, but it is very hard to judge.”

A view to the future
 

Whatever the trajectory of lifting restrictions, one thing is for certain: it’s going to take time, and the world will have changed. While more people will be able to access spaces that have been previously restricted, they will appear different, with many more having to wear masks and avoiding crowds. As long as there is lack of access to a vaccine, which some scientists say will take between nine months to two years, there’s a struggle for the virus to be properly contained.

Public spaces will have to be thoughtfully considered in order to keep people safe. More streets will have to be pedestrianised to allow better space for people to walk and bars and restaurants have had to creatively think through their setup to maximise outdoor areas.

The UK can learn from other countries when it comes to how they’ve managed a slow lifting of lockdown. India, for example, has begun to slowly reopen domestic transport and shops. Shefali Gandhi, and owner of a restaurant in Goa has suggested that the outdoor spaces will be the key to revving up the sector once again. “In cities like Mumbai, people have been stuck in matchbox-sized apartments for two months,” she says. “From a practical perspective, gardens also make it easier to space out the seating plan and sanitise the tables more easily.”

Indoor gyms are another space that will be one of the last to open, with people in small enclosures sharing equipment and space. In China, many new design elements have been integrated to help keep patrons safe while working out. The UK will be looking towards other countries further along in their lockdown journey to help boost their own economy and reignite the affected industries.

 

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