Activity 2: How is COVID 19 Pandemic affects the

growth of economy worldwide? Cite at least 5 situations and expound. (25

points)
Rise of unemployment
Due to the impact of a pandemic on people and discrimination against unvaccinated people the
unemployment rate rise especially in those high-risk jobs that require interaction like schools,
airports, malls, and offices due to these circumstances, many people became unemployed
due to Inter-Agency Task Force for the Management of Emerging Infectious Diseases
Resolutions rules and regulations to control and mitigate the spread of the virus, it is applied for
the safety of the masses and avoid collateral damage, especially the lives of people that can
potentially spread the virus accidentally because it can be caught through interaction like
touching and airborne.
due to the issue economy is declining all over the world and resulting in crisis that many suffer
especially our economy because many people are depending on the government and the small
business that let them cope up during pandemic.
Small business bankruptcy
small businesses suffer debt and bankruptcy due to the rise of prices of their materials and
ingredients especially in the necessities like food, water, and canned goods because customers
decrease in numbers and sometimes don't go out due to continuous lockdowns made by the local
government to avoid the spread of the virus and also decrease in people that's why it leads to
bankruptcy because they can't manage it anymore due to high maintenance but lower-income
that's why instead of continuing they ending it and will start again if the pandemic ends.
Economists don`t see bankruptcies as necessarily bad. When tough times strike, some businesses
inevitably will struggle; the bankruptcy process helps sort out which should be given a second
chance and which should be liquidated. The resulting reallocation of capital and labor, painful as
it may be, helps to rebuild the economy.

Long-term damage to potential yields, productivity gains

Since many establishments are affected and the economic decline many producers cant produce
the same result in the recent years that can long-term damage the potential output and
productivity gains because first, the price of the sugar and oil increase that's why prices increase
also to be able to sustain their production and also Inter-industry reallocation, or inter-industry
effects, plays an important role in explaining aggregate reallocation effects, but there are also
some firm-to-industry, or internal, effects. branch. therefore in the future, the global economy
needs to adjust to sustain the needs of development and sustainability.
Decrease in Income
Even if they didn’t lose a job, many workers have had to reduce their hours or take a pay cut due
to the economic fallout from the pandemic. About a third of all adults (32%) say this has
happened to them or someone in their household, with 21% saying this happened to them
personally. Most workers who’ve experienced this (60%) are earning less now than they were
before the coronavirus outbreak, while 34% say they are earning the same now as they were
before the outbreak and only 6% say they are earning more. this was according to research made
by the pew research center organization in 2020.
This means most of the employees are suffering from low profit and scarcity and in addition to
the scenario the increase in the price of the daily necessary products they consumed will badly
affect the flow of the global economy because if the production and consumption are affected
there will be an anomaly or collateral damage that its either scarcity or surplus that will badly
affect the global economy.
Covid 19 effect on tourism
According to unctad.org The crash in international tourism due to the coronavirus pandemic
could cause a loss of more than $4 trillion to the global GDP for the years 2020 and 2021,
according to an UNCTAD report published on 30 June.
The estimated loss has been caused by the pandemic’s direct impact on tourism and its ripple
effect on other sectors closely linked to it.
The report, jointly presented with the UN World Tourism Organization (UNWTO), says
international tourism and its closely linked sectors suffered an estimated loss of $2.4 trillion in
2020 due to direct and indirect impacts of a steep drop in international tourist arrivals.
A similar loss may occur this year, the report warns, noting that the tourism sector’s recovery
will largely depend on the uptake of COVID-19 vaccines globally.
“The world needs a global vaccination effort that will protect workers, mitigate adverse social
effects and make strategic decisions regarding tourism, taking potential structural changes into
account,” UNCTAD Acting Secretary-General Isabelle Durant said.
UNWTO Secretary-General Zurab Pololikashvili said: “Tourism is a lifeline for millions, and
advancing vaccination to protect communities and support tourism’s safe restart is critical to the
recovery of jobs and generation of much-needed resources, especially in developing countries,
many of which are highly dependent on international tourism.”
This explains that due to guideline provided by IATF and other agencies that focused on tourism
Most of the business sectors are affected that’s why global economy are losing great amount of
money through this pandemic many umemployment increase, lost of jobs and scarcity in
production affects the flow of the economy and the countries that isn’t that developed well.