MAKROEKONOMSKI EFEKTI PANDEMIJE COVID-19 U EVROPSKOJ UNIJI I SVIJETU
THE MACROECONOMIC EFFECTS OF COVID-19 IN THE EUROPEAN UNION AND THE WORLD

Author(s): Tjaša Redek, Polona DOMADENIK, Matjaž Koman
Subject(s): Economy, National Economy, Business Economy / Management, Micro-Economics, Marxist economics, Health and medicine and law, Public Finances, Accounting - Business Administration
Published by: Finrar d.o.o Banja Luka
Keywords: coronavirus;European Union; economy; GDP;
Summary/Abstract: The virus has impacted the economy through the following key channels: containment measures,and the supply and demand side problems caused by the disease. Lockdowns, cessation of certain services and public life, problems in organizing work-processes, problems in logistics and value chains at large, increased uncertainty, increased unemployment, and many others caused a simultaneous crunch on both the supply and the demand side of the economy.As a result of the simultaneous shock to both sides, the impact has been very strong, causing an endogenous spiral and resulting in a much higher overall impact than initially expected.The purpose of this paper is to present the impact of the virus-related crisis on the economies,with the focus on the European economy and Slovenia, relying on most recent available statistical resources. First, a brief theoretical background is provided, explaining more in detail how the virus impacted the economy. This is followed by an overview of the macroeconomic data, including a reflection to the financial and economic crisis 10 years ago. A sectoral perspective is provided next. The paper concludes with a selection of forecasts for the future.While the crisis has had a negative impact on the overall macroeconomic performance, significant sectoral as well as cross-country differences can be observed. Forecasting the future and overall impacts of the virus is at the moment very risky, however, the forecasts are unanimous in the evaluation that the crisis in 2020 will be significantly deeper than the crisis in 2009. Future effects and development of the crisis depend on a number of factors(1) the duration and type of restrictions, (2) government aid programs, (3) consumer behaviour), (4)timing of medication/vaccine, (5) unemployment rates, and (6) impact on household budgets.Primarily, it is important to understand that these factors could have very different impacts on different industries and countries.

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