The Global Economy Declined In 2020, But Some Countries Did A Lot Better Than Others

The pandemic devastated much of the world. The human cost was high: about 2 million people worldwide died in 2020 and the death toll continues to rise this year.

A new report by the Brookings Institute demonstrates that economies were not spared either, as a 3.3% decline occurred — the worst peacetime decline since the Great Depression. 

What Happened: Although there was a 3% drop in global economic outputs in 2019 — the first time outputs fell since the Great Recession of 2008-09 — the same was not expected of 2020. 

The pandemic mostly hit developed nations first, striking quarter-over-quarter economic declines in developed countries like Spain, Italy, France, the United Kingdom and the United States. 

Who Won: But countries in East Asia — including Taiwan, South Korea, Hong Kong, Japan and China, where the pandemic began — recovered quite nicely, in part because of strict lockdown policies.  

Outside of China, which grew its economy by 13.5%, most of the other countries on this list contracted their economies, but by a smaller margin than other advanced nations at 3.7%. 

“They were able to quickly bring infections under control and were subsequently able to leverage their manufacturing prowess, benefiting from the strength of global demand for goods, both in terms of medical equipment and telecommunications equipment,” the report said. 

Who Lost: Despite the significant hits that occurred in Western Europe, economic contractions were most pronounced in developing countries in the Middle East, Latin America, eastern Europe, and sub-Saharan Africa, which were impacted by lowered external demand and low tourism numbers. India too saw a hit, with its GDP dropping by a quarter. 

Photo: Christine Roy via Unsplash.