What's going on?

This was the year the entire economic universe revolved around the astronomical effects of one microscopic virus.

What does this mean?

When coronavirus first broke out in China, economists� first worry was that it would disrupt the global supply of goods. If all those �made in China�-labeled products weren�t being made in China, after all, global growth might falter. They needn�t have worried: a drop in supply isn�t exactly an issue if there�s a collapse in demand too. With the virus locking the whole world down soon enough, shoppers suddenly weren�t buying their usual products any more � and the global economy took a nosedive.


Enter the world�s central banks and governments, which promised to do whatever it took to cushion the blow. Central banks� support came in the form of interest rate cuts and bond-buying programs, both of which aimed to encourage businesses and individuals to borrow � and then spend � more money. Governments, meanwhile, slashed taxes, while also handing out relief payments to anyone who was forced out of work.

Why should I care?

For markets: Everybody hurts.

The pandemic�s spread has had a massive impact on the job market. While the US unemployment rate has more than halved since the first coronavirus wave hit in spring, there are still ten million more Americans looking for work than there were before the outbreak. And since workers are the building blocks of an economy, a dwindling number of them risks economic growth next year and beyond.

The bigger picture: A long road to recovery.

At the height of the first wave this spring, the US economy shrank by a record 33% annualized rate in the second quarter, the eurozone by a comparable 36%, and the UK by 60%. And even with vaccines now in play, the IMF reckons it�ll take the whole of 2021 for the global economy to bounce back to pre-pandemic levels.