everis has recently published its findings from the latest report about how the current pandemic has impacted the economy in different markets. Through this debrief, the company has analyzed the consequences that the Covid-19 crisis will generate, and diverse proposition on how to manage it within the business network.
Thus, the paper makes a review in how the p
andemic has affected in a global perspective, going over countries with similar patterns but different degrees of the impact and speed contagion. Despite the dissimilarities in the initial strategies, a common decision of test control and strict confinement stood out, as they learned more about the disease.
Worst economic results for world powers in the last 50 years
According to everis report, the speed and depth of the contraction in the GDP are on an unprecedented scale. It might register a 20% loss in the second term in Spain, and a total decrease between 9-15% in comparison to 2019. Economies are not able to withstand long inactivity periods, and its direct impact over unemployment rates has increased by 4-6 times due to temporary lay-offs. Stock markets have anticipated the crisis with fall downs between 30-40%, although the activity field has a lot to influence in the decrease, all are aligned with the current economic activity.
Additionally, the recovery is foreseen as slow, in a U or L form, given that with GDP contractions under 4% never recover in V.
Restart in June with several pandemic scenarios to be regarded
The report shows that economies have to act always considering multiples resurgence scenarios. Pandemic evolution will be impacted by four principal vectors – vaccines, prophylaxis, group immunity, and propagation – drive to establish 3 economic recovery scenarios, which will harm economy structurally in several ways
- First scenario: caused by a minor resurgence, which will happen along June to stabilize in August and reach next normal in November. This little resurgence would be caused by the unlock measures or imported cases.
- Second scenario: caused by a relevant resurgence. The beginning of this new disease wave will have place in August, to stabilize in November and reach next normal on January 2021.
- Third scenario: provoked by a continued pandemic. This vision exposes that there will be a periodic resurgence, without reaching and stabilize the situation until 2021.
Four drivers for economic recovery
In this way, the report highlights four sectors to occupy a protagonist role in the economic recovery process: consumer, tourism, public agile, and efficient investment and exports. After the first round of investments destined to content the crisis and protect the economy, a second-round is expected. This last round is supposed to be focused on boosting and developing key sectors. Domestic consumption, supported by tourism will reactivate the Spanish economy with the restart of these industries. Exports, on the other hand, will contribute to invigorating manufacturer industries.
Daniel Úbeda, partner in the consulting firm everis, states that ‘to mitigate this crisis companies have to be innovative, restructure their business rethinking the model, redesign organizations and resize resources to compete in the so-called –next normal- post-Covid 19.’
Moreover, the company sets the main threats that enterprises will face in this new context: multi-scenario strategies, trade war to reconquer market share, changes in behavioral paradigms, and resilient organization development.
In that sense, Úbeda thinks that ‘it is completely necessary to create new digital products and services, as well as attracting new partners or look for synergies with other companies. Redraw the whole organization to make it more flexible and open it is a way to add new capabilities, especially those related to Business Analytics & Data Strategy. That will allow to balance resources in the most needed areas and strengthen decision making based on data’.