Macroeconomics and the Impact of COVID-19 on Local and International Trade, Purchasing Behaviour, Inflation, and Vaccination

Macroeconomics

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
HOW THE COVID-19 AFFECTED THE LOCAL AND INTERNATIONAL TRADE..............1
COVID-19 AND THE PURCHASING BEHAVIOUR..................................................................3
THE IMPACT OF COVID-19 ON INFLATION DURING THE PANDEMIC............................5
THE MODERATING ROLE OF VACCINATION ON THE ECONOMY...................................6
RECOMMENDATIONS AND CONCLUSION............................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Macroeconomics deals with behaviour, structure, decision making and performance of
aggregate economy. It is more emphasised towards influences on as well as choices made by
people individually in an economy. It involves understanding about economy wide events
comprising total production of goods and services, employment level, general behavior of prices,
etc. In economy of UK and other nations, COVID-19 resulted in travel cancelations,
expenditures in health, unemployment and many more that contribute towards depressed
economy worldwide. The pandemic affected financial markets, number of industries, travel,
shipping and employment adversely.
The essay highlights the ways in which COVID-19 affected trade locally and
internationally. It further elaborate COVID-19 and power of purchasing along with moderating
role of vaccination on economy.
HOW THE COVID-19 AFFECTED THE LOCAL AND INTERNATIONAL
TRADE
The pandemic of COVID-19 has resulted in drastic loss of products, resources and services
worldwide. The pandemic impacted trade of a country in services that saw decline in imports and
exports. The pandemic has had disruptive effects on trade at international level. As per WTO
forecasts, global trade due to the pandemic has fall by around 20% in 2020 (Breckenridge, 2022).
The elements behind the drop are similar to those causing decline in practices of economy,
including effects of virus, mitigation measures for saving lives addition to protect health.
Interdependence among trade and that of GDP states that they face huge effects. For instance,
containment measures and sickness declines growth of GDP that have negative impacts on gross
domestic product. Furthermore, effects of slower trade are exacerbated through restrictive
policies of trade.
During COVID-19 shock, global trade decline by less that during international financial
crisis in the year 2009. It is because of representation of services of majority of economy
practices in advanced economies. There was different impact of the pandemic on across the
countries. For instance, in the year 2019, China was around $40 billion in exports on same month
last year, at same time, US was down in the July of same year by $20 billion. It is also analysed
that decline in US exports in May in comparison with China in February was approximate $50
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billion (Espitia and Et. Al., 2021). However, COVID-19 impacted adversely in trade of some
countries but impacted good for others. For example, Brazil experienced bounty in its exports of
agriculatural commodities including soybeans and frozen beef by jumping from $464 million in
April 2020 to $639 million in May. Other markets at global level have not been lucky. It is
determined that car exports in Spain, Japan, US and Canada was down. Aircraft exports in UK
declined sharply by approximate $6 million in May as well as June. Moreover, exports and
imports of garments globally also declined.
At international level, one of effects of COVID-19 has been to generate around free for all in
utilisation of policies of restrictive trade, specifically through using export restrictions on
products, for example, medicines, food and medical equipment (Vidya and Prabheesh, 2020).
Number of nations have imposed restrictions of exports have suspended import duties of these
products. An individual nation might calculate that the combination of export restrictions as well
as import liberalisation is clever policy to themselves.
Businesses in UK engaged in trade at global level experienced and are experiencing
challenging trading situations as outcome of the pandemic. It has been analysed that supply
chains are under severe pressure, while, demand patterns are deviating from predicted norms of
trade (Benz, Gonzales and Mourougane, 2020). Ample number of concerns are raised related to
accessing essential commodities for consumer’s addition to public authorities. In this regards,
government of UK announced significant package of support of funding for businesses operating
in UK that are negatively affected by COVID-19.
Trade of UK fell sharply in July 2020 with COVID-19 pandemic driving exports to around
£1.7 billion which was lower in July 2018 along with imports falling by £3 billion (Erokhin and
Gao, 2020). The fall in trade at domestic level was driven largely by a decline in pharmaceutical
together with medicinal products, that have been hit adversely. Many of hardest hit sectors
comprises of manufacturers of durable that are motor vehicle, air transport, professionals and
business services. All these have been hit though declining demand and disruptions to supply.
Pandemic of COVID-19 came at challenging juncture for policies of trade in UK and
internationally. In aspect to UK, shock to trade dovetails with further shock that is caused by its
exit from single market of EU. In case, when UK were to leave with bare bones trade deals, it
has chances to face losses in products by 15% along with 30% on services.
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