3 of 2020’s Biggest Economic Challenges

3 of 2020's Biggest Economic Challenges

(TargetLiberty.org) – Economists didn’t expect to see great performances this year – the World Bank predicted modest growth, just slightly better than 2019’s weak performance. While the US economy was creating new jobs under President Trump, it was supposed to be a moderate, unexciting year.

It didn’t quite work out that way.

Since March, businesses and consumers have been faced with unheard-of restrictions that have led to the worst economic crash in at least 12 years – and possibly in decades. Various International and Economic Organizations estimate the global economy will shrink between 4.2 to 4.4% this year. The reason, of course, was the coronavirus pandemic.

Lockdowns and restrictions have hit most businesses hard, except online retailers and entertainment providers – who found themselves struggling to cope with a surge in demand. Restaurants, bars and non-essential shops have often faced closure, though, and many have been kept in business by government support that will need to be paid off through tax increases. At the same time, millions of Americans have lost their jobs or seen their incomes fall, reducing demand for products and services.

Seasonal businesses have been hit even harder. Income insecurity and international travel bans have been catastrophic for tourism, and retailers that rely on the holiday spending season are now facing a new wave of lockdowns and tougher rules.

Overall, this year has been a disaster for most businesses, and while 2021 should see the economy recover to 2019 levels, that will likely be too late for a lot of companies.

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