COVID Impact: 6 Ways Economy Will Change in Most Countries
The public health measures taken by government of various countries due to the Coronavirus crisis have dramatically changed lives of people in various countries and the way many industries operate.
Here are some of the major economic changes we may see or already seeing in the coming time:
(1) Remote working will be permanent
The norms of social distancing have accelerated the process towards an increase in remote work. Although the coronavirus pandemic will probably come to an end with the arrival of a vaccine or effective treatment, it is likely that not all of us will return to work in the office, as many companies will see that remote working can be productive and will allow them to save money especially on the infrastructure cost.
The boom in working from home will have several effects. The first (and most obvious) is that it will allow many people to choose to live in less expensive areas, as it will not be necessary to live near the office for easy transportation. This will save a lot of money for employees who previously lived in expensive areas or drove to work every day.
But the other effect of this trend is that companies no longer need so many offices, and the cost of commercial property will drop. Expensive cities, such as New York, San Francisco, Tokyo, London and Mumbai, may be more affected, as individuals working in these cities will seek cheaper metropolitan areas to live in.
(2) Certain industries will benefit, while others will take a hit
The health, technology, pharmaceutical and home delivery industry sectors will benefit. But the travel industry (such as hotels, cruises, and airlines), as well as the entertainment industry (such as sporting events and concerts) will suffer for a longer duration because of fear in public mind.
While interest in travel and public events will eventually return, everything will change dramatically. A large number of people will likely choose to watch their favorite concerts online or on television, while traveling by plane or taking a train may require more time away or health checks. Some argue that air travel will once again be a luxury, with more space or fewer passengers on board.
The race to find effective treatments and a vaccine against coronavirus will propel major pharmaceutical developments in both general medicine and biotechnology.
These industries will benefit from increased government and private investment toward the development of new treatments, just as they did in World War II. This will generate more effective treatments not only for coronavirus, but also for a wide range of diseases and conditions.
(3) Eating in restaurants will be more expensive
It is a sad reality that some restaurants will not survive the social distancing, and therefore the rest will be transformed.
Their new of functioning will be:
Fewer tables with more distance between them; more outdoor establishments. And due to a lower supply, food could be more expensive.
Many other restaurants will be dedicated mainly to take-away service, instead of operating with a smaller number of tables or a more expensive menu. In addition, the tendency to eat at home, to which we have become accustomed during quarantine, will not disappear immediately.
You may like to read: 7 ways to start preparing for increasing your income during lockdown
(4) Increased investment in public health
The coronavirus pandemic is likely to lead to increased emphasis on equitable access to healthcare. There will likely be greater investment in public health, as well as an increase in state funding and subsidies. The debate over funding for Medicaid and Medicare, as well as the cost and handling of private health insurance, will take on greater importance.
On the other hand, telemedicine will also take off, making doctor’s visits faster, perhaps less expensive, and with more flexibility in schedules for common illnesses.
The hospital model will also change, with more focus on complex situations, cracks, laboratory services and deliveries, leaving many specializations dedicated to telemedicine alone.
(5) Online education
Educational costs are likely to decrease, as many educational institutions will be better equipped to provide online classes. Many universities, as well as primary and secondary schools, will have a greater supply of cyber education. This will expand the options for educating your family in a cost-effective and flexible manner.
(6) Interest rates will remain low
The economic chaos caused by the coronavirus will force governments of various countries to lower interest rates and this will benefit citizens greatly.
In many cases they have been brought down to zero, following in the footsteps of other developed economies, such as Germany and Japan. This means that our savings will be affected i.e. interest earned through traditional savings accounts, and bonds will yield less interest. And many will opt for investment alternatives, such as the stock market or real estate.
Current period is an excellent opportunity to refinance your mortgage with a lower interest rate, which could help you save thousands on your loan.
However, those wishing to purchase a new property should have good credit and income streams, as many financial institutions are already raising their standards for lending. So, while home prices may go down if the economy gets worse, it will be harder to get a mortgage without good credit, and a healthy down payment.
Hi, I am Nikesh Mehta owner and writer of this site.
I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business.