The cartoon depicted above is a pre-Covid19 cartoon. Sneezing like this can lead the other person scouting for cover as if he has seen a live ghost in broad day light with his comment being ‘May God bash you’.
However what happens when the world’s largest economy whose nominal GDP is estimated to be USD 20.4 Trillion, sneezes (contracts) at average annualised rate of 19.20% over a period? It surely has a catastrophic effect on it as well as other countries dependant on it by way of exports. The said contraction was from its peak in the fourth quarter of 2019 through the second quarter of 2020.
The pace of recovery from the pandemic downturn, the deepest going back to 1947, was equally stunning. The Commerce Department’s Bureau of Economic Analysis said gross domestic product rebounded at a historic average rate of 18.3% between the second and fourth quarter of 2020.
Mandatory shutdowns of non-essential businesses in March last year to slow the first wave of coronavirus infections left the economy reeling, throwing a record 22.362 million people out of work. The government provided nearly $6 trillion in pandemic relief, while the Federal Reserve slashed its benchmark overnight interest rate to near zero and is pumping money into the economy through monthly bond purchases. This has allowed economic activity to resume. The government also said the economy shrank 3.40% in 2020, instead of 3.50% as previously estimated. That was still the biggest drop in GDP since 1946.
The International Monetary Fund has significantly raised its growth forecasts for the United States to 7.0% in 2021 and 4.9% in 2022, up 0.6 and 1.4 percentage points respectively, from its forecasts in April.
NPowersU Expert Opinion
With around 50% of its population still left to be fully vaccinated as at 30th July, 2021 and new variants coming out of Covid19 closet at a steady pace, only time will tell whether US economy will sneeze further in future. After the historical and astronomical fiscal package already given by the then Government, the new Government have its hands tied and will have to find novel ways to save its economy seeing the rising fiscal deficit and rising debt.
It is now well understood that in the fight of the titans (US and China), the whole world has suffered and will suffer immensely in the near future.
Hope someone will soon weave a ‘N95 MASK FOR ALL THE ECONOMIES’ to survive this global pandemic.
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