PwC MSME Survey 2020
Impact of COVID-19 on small and medium businesses globally
As at January 2020, the IMF projected that global growth will improve from 2.9 % in 2019 to 3.3% in 2020. Following the COVID-19 pandemic and its impact on human health,
business activities, jobs and livelihoods, and the overall economy, the IMF in April 2020 revised its global growth projections downward to -3%. This implies that the world will enter
into a recession this year, with the outlook much lower than the financial recession in 2008. The IMF forecasts the global economy to bounce back and out of the recession in 2021
with significant 5.8% growth, as business activities return to normal levels aided by supportive policy measures from countries.
Effect on Supply Chain
Travel restrictions and lockdown
measures across countries have
impacted supply-chains across countries.
This has led to shortages in materials, in
addition to labour supply for industrial
and non-industrial activities.
Effect on labour market
The global pandemic has exposed the
world's labour markets to vulnerabilities, as
enterprises halt operations, reduce work-
hours and reduce staff strength. ILO predicts
unemployment to reach over 25 million with
loss from workers' income to reach an
estimated USD 3.4 trillion
on
Globally, countries have
spent over USD8 trillion so
far on fiscal policy to buffer
the effect of COVID-19 on
their respective economies,
and fiscal deficits are on the
rise.
PwC MSME Survey 2020
PwC
Source: ILO, WEF, IMF, PwC analysis
M
AC
Effect on productivity
Movement and work disruptions have
disrupted business activities, as
impacted the liquidity and profitability
of firms.
Effect on value chain
There has been interruptions and
slowdown in the value-chain of sectors
such as transportation, non-food retail
businesses, aviation, education,
hospitality, automobile, tourism, sports,
among others.
June 2020
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