Which economy did the best and the worst during the epidemic?

T.He speeds up The economic bounce-back from the Great Recession of 2020 has surprised many forecasters. Output across 38 is mostly rich OECD The combined countries probably crossed its pre-epidemic level a few months ago. The average unemployment rate across the club is 5.7%, consistent with the post-war average. And overall household income, adjusted for inflation, above its pre-covid levels. The overall picture has become significantly smoother, with even more variants of the coronavirus emerging. But it hides the whole difference below. The epidemic has created winners and losersAnd the dispersal between them will probably continue in 2022.

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To evaluate these differences, Economist Collected data from five economic and financial indicators-GDP, Household income, stock market performance, capital expenditure and government debt – for 23 rich countries. We ranked each economy based on how well it performed on each measure by creating an overall score (the table below shows the overall ranking and four of our five indicators). Some countries remain in the economic hole, while others are doing better than before the epidemic at almost every step. Denmark, Norway and Sweden are all close to the top, and the United States has performed reasonably well. Conditions have worsened in many large European countries, such as Britain, Germany, and Italy. Spain has done the worst.

Title change GDP From the end of 2019, our first indicator, offers a snapshot of economic health. Some countries have always seemed to be at risk for falling travel bans and falling service costs – especially in southern Europe, which relies heavily on tourism. Other places, including Belgium and the UK, have experienced high levels of Covid-19 infections and deaths, which have limited consumer spending.

Granular information helps to fill the picture. The change in household income gives an idea of ​​how well the families have done, as it includes not only income from employment but also handouts from the government. Our measure is in real terms, which adjusts for the decline in purchasing power as a result of the recent rise in inflation.

In some countries, especially where the impact of the virus was relatively small, labor markets were not severely affected so that people could continue earning. Japan’s unemployment rate has been declining since the epidemic began. In contrast, Spain’s rate increased by three percentage points between February and August 2020.

Some governments have sent huge sums of money to make up for lost income. This was America’s strategy: Although unemployment rose as the economy locked down, households received more than t 2trn in government transfers in 2020 and 2021, in the form of top-up unemployment benefits and stimulus checks. Canada has done something similar. Other countries, such as the Baltics, have focused their financial firepower on protecting the cash flow of farms or increasing health-care capacity. Austria and Spain are unlikely to retain jobs or compensate victims: real household incomes in both countries are still about 6% below pre-epidemic levels.

What about the company? The performance of the stock market indicates their health, as well as the attraction of a country to foreign investors. Share prices in Britain are a bit lower today in the wake of the epidemic – probably a reflection of Brexit-related uncertainty. The UK hosts fewer companies in the high-growth sector who have benefited from the adoption of epidemic-induced technology and lower interest rates. America, where there are more such companies, has seen a jump in its stock market. But it has nothing to do with the Northern European market, where prices have risen. Three of the ten largest companies in terms of market capitalization in the Danish market have adequate stocks to hold healthcare, epidemics.

Capital expenditure, our fourth measure, provides a measure of business optimism about the future. Some countries are in the midst of a capex boom: in the United States, for example, entrepreneurs are finding opportunities created by the epidemic, and companies are spending heavily on technologies that make working from home more efficient. Goldman Sachs, a bank, forecast in October S.AndP 500 companies will spend 18% more on CapX and research and development in 2022 than in 2019. Investing in some other place, by contrast, is even more painful. Norway has seen cuts in oil and gas caps.

Our last indicator is public debt. Equal to everything else, a large increase in government debt is worse than a small debt, as it could indicate potentially large tax increases and spending cuts in the future. Despite the presence of the United States, Britain, Canada, and others, each country did not collect large amounts of debt during the epidemic. Swedish public debt shares rose just six percentage points GDP. This is a reflection, perhaps, of the fact that the country, which has largely avoided drastic lockdowns, needs less financial support.

Expansion of the Omicron variant is expected to slow growth in early 2022. But the economic recovery is still likely to continue for years, and the overall picture will probably mask the difference again. The OECD Expect some of the worst performers to start catching up: Italy will grow 4.6% in 2022, above the club’s average pace of 3.9%.

But those who fall behind have to go far. By the end of next year OECD Combined hopes GDP Our top three ranked countries are 5% higher than their pre-epidemic levels. Output for the three worst performers, meanwhile, is expected to be only 1% higher than the previous Covid-19. The unequal effects of the epidemic will, in other words, be tolerated. 3

Amendment (31st December 2021): An earlier version of the table showed election data from 11 countries It has now been expanded to show 23 countries. We also corrected the miscalculation of Japan’s household income and Greece’s public debt. This has led to smaller changes in rankings than shown in the original table. The United States and Canada each moved up one place (9th and 10th, respectively), and Japan tied for 20th to 21st. Sorry.

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This article was published in the print edition of the section “Finance and Economics” under the heading “Winners and losers”.

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