Economic scars caused by Covid will be slow to heal

30 October 2020 (Last Updated October 30th, 2020 09:00)

30 October

Konstantina Beleli, an economist, shared an article on the US economy posting record growth in the third quarter, a direct result of the injection of $3 trillion as part of the pandemic relief package that drove consumer spending.

However, experts believe that the health and economic damages caused by the Covid-19 crisis could take over a year for the country to recover.

The gross domestic product (GDP) surged at 7.4% on a year-on-year basis in the third quarter, after having dipped to a low of 9.0% from April to June this year.

The government’s relief package has helped boost consumer spending which alone contributed 76.3% to the spike in GDP.

The Commerce Department, however, stated that the 33.1% annualised growth rate was not enough to ease the human tragedy caused by the global pandemic, with thousands of US citizens still unemployed and more dead.

Depleting funds and uncertainties around a second round of rescue, a swell in cases and restrictions on businesses, are indicative of a slow recovery from the pandemic.

Meanwhile, Adam Tooze, a historian and professor, re-tweeted on the US economy having to grow at 4.5% annually starting from the fourth quarter of 2020 to return to normalcy by the end of 2022.

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