COVID-19 Crushes Global Economy but Emerging Markets are in Bigger Troubles

By 2021, it is of high expectation that the world will return to normalcy, and economies around the world should recover from the adverse effect of coronavirus spread. However, emerging markets may continue to wallow in economic crisis as contemporary issues like weak GDP growth rate, unemployment rate, high debt profile, income inequalities, among others, remain in the picture, most of which have been worsened by the global pandemic effects.

The Great Lockdown Through a Global Lens

The Great Lockdown is expected to play out in three phases, first as countries enter the lockdown, then as they exit, and finally as they escape the lockdown when there is a medical solution to the pandemic. Many countries are now in the second phase, as they reopen, with early signs of recovery, but risks of second waves of infections and re-imposition of lockdowns. Surveying the economic landscape, the sheer scale and severity of the Global Lockdown are striking.

Global economy on a Tripod: Deflation, Inflation and Recession in 2020

From economic theories, one characteristics of a recession is that price level of goods and services will become low. If this should go by and considering that economic theories are in favour of low inflation to boost economic growth, then the low prices of goods and services is meant to be a factor that will lift economies from contraction to boom. However, this is not always the case especially for countries experiencing deflation.

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