COVID-19 recession

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COVID-19 recession

Map showing real GDP growth rates in 2020, recorded by the International Monetary Fund as of 26 January 2021; countries in brown are those that have faced a recession.
Date	20 February 2020
Type	Global recession
Cause	COVID-19 lockdowns in response to COVID-19 pandemic
Outcome	2020 stock market crash Sharp rise in unemployment Collapse of the tourism industry Collapse of the hospitality industry Collapse of the price of oil Collapse of small businesses Destabilization and collapse of the energy industry Increase in government debt Increase in economic inequality between rich and poor Major downturn in consumer activity Market liquidity crisis Protests, riots, and civil unrest Trade disruption and shortages Increased inflation 2022 stock market decline

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The COVID-19 recession was a global economic recession caused by COVID-19 lockdowns. The recession began in most countries in February 2020. After a year of global economic slowdown that saw stagnation of economic growth and consumer activity, the COVID-19 lockdowns and other precautions taken in early 2020 drove the global economy into crisis.^[1][2][3][4] Within seven months, every advanced economy had fallen to recession.^[5][6]

The first major sign of recession was the 2020 stock market crash, which saw major indices drop 20 to 30% in late February and March. Recovery began in early April 2020; by April 2022, the GDP for most major economies had either returned to or exceeded pre-pandemic levels^[7] and many market indices recovered or even set new records by late 2020.^[8][9][10]

The recession saw unusually high and rapid increases in unemployment in many countries. By October 2020, more than 10 million unemployment cases had been filed in the United States,^[11] swamping state-funded unemployment insurance computer systems and processes.^[12][13] The United Nations (UN) predicted in April 2020 that global unemployment would wipe out 6.7% of working hours globally in the second quarter of 2020—equivalent to 195 million full-time workers.^[14] In some countries, unemployment was expected to be around 10%, with more severely affected nations from the pandemic having higher unemployment rates.^[15][16][17] Developing countries were also affected by a drop in remittances^[18] and exacerbating COVID-19 pandemic-related famines.^[19]

The recession and the accompanying 2020 Russia–Saudi Arabia oil price war led to a drop in oil prices; the collapse of tourism, the hospitality industry, and the energy industry; and a downturn in consumer activity in comparison to the previous decade.^[20][21][22] The 2021–2023 global energy crisis was driven by a global surge in demand as the world exited the early recession caused by pandemic-related lockdown measures, particularly due to strong energy demand in Asia.^[23][24][25] This was then further exacerbated by the reaction to escalations of the Russo-Ukrainian War, culminating in the Russian invasion of Ukraine and the 2022 Russian debt default.^[26]