Country: Belgium

Committee: ECOFIN

Delegate: Ghina Nurul Tasha

Topic: “The Impact Of COVID-19 On The Global Economy”

Introduction
While there is no way to tell exactly what the economic damage from the global COVID-19 novel
coronavirus pandemic will be, there is widespread agreement among economists that it will have severe
negative impacts on the global economy. Early estimates predicated that, should the virus become a
global pandemic, most major economies will lose at least 2.4 percent of the value their gross domestic
product (GDP) over 2020, leading economists to already reduce their 2020 forecasts of global economic
growth down from around 3.0 percent to 2.4 percent

The COVID-19 pandemic pushed economies into a Great Lockdown, which helped contain the virus and
save lives, but also triggered the worst recession since the Great Depression. Over 75 percent of
countries are now reopening at the same time as the pandemic is intensifying in many emerging market
and developing economies. Several countries have started to recover. However, in the absence of a
medical solution, the strength of the recovery is highly uncertain and the impact on sectors and
countries uneven.

Background Information
This year, economic activity in Belgium is down by 9 % as a result of the restrictions imposed to prevent
the spread of the Covid-19 pandemic. As these restrictions are eased, the economy should gradually
recover. In the first instance, the revival of household consumption will be underpinned by pent-up
demand, but there will also be more structural support from purchasing power, which will continue to
rise during the projection period. Conversely, business investment will take somewhat longer to recover
and net exports will continue to drag down growth throughout the projection period. Real GDP is
expected to recover, with a year-on-year growth of 6.4 % in 2021 and 2.3 % in 2022. Nevertheless, even
at the end of 2022 GDP will still be around 4 % below the level that was projected before the crisis and
the Belgian economy will thus suffer permanent damage from the health crisis. Public finances will
likewise be hard hit: the budget deficit will climb to more than 10 % of GDP in 2020. More importantly,
even after that the deficit will remain structurally high, at more than twice the level that would have
been reached without the crisis.
What should the governments be doing to deal with the impact of the
coronavirus crisis on the economy?
On the demand side, governments should favour, where possible, measures that benefit final
consumers directly and leave them free to decide how to spend the cash they receive. This is in contrast
to measures that tie support to the consumption of specific goods or services which can distort relative
prices, send inaccurate signals to producers, and reduce consumer choice. Support for MSMEs – which
are generally least able to cope with large economic shocks

How does the coronavirus affect the national economy of member states?
Governments have turned to proven public health measures, such as social distancing, to physically
disrupt the contagion. Yet, doing so has severed the flow of goods and people, stalled economies, and is
in the process of delivering a global recession. Economic contagion is now spreading as fast as the
disease itself.

This did not look plausible even a few weeks ago. As the virus began to spread, politicians, policy
makers, and markets, informed by the pattern of historical outbreaks, looked on while the early (and
thus more effective and less costly) window for social distancing closed. Now, much further along the
disease trajectory, the economic costs are much higher, and predicting the path ahead has become
nearly impossible, as multiple dimensions of the crisis are unprecedented and unknowable.

What should the EU be doing to support the economy?

backing zero-interest unsecured loans for businesses that lost more than half of their annual sales to the
coronavirus, access to venture capital investment, promoting customer demand, etc

To what extent should the international community support developing countries

financially?
Until they can prevent poverty in every developed countries.

How developed member states will provie humanitarian aid to the most fragile
countries in the world?
By giving additional health labor for them, mobilizing foods and funds, giving access to essential care.

Bibliography
https://www.statista.com/topics/6139/covid-19-impact-on-the-global
economy/#dossierSummary__chapter1
https://www.weforum.org/agenda/2020/06/imf-lockdown-recession-covid19-coronavirus-economics-
recession/

https://www.nbb.be/en/articles/belgian-economys-recovery-coronavirus-crisis-will-be-difficult-and-
budget-deficit-2022-will