As the economic numbers impacted by COVID-19 began emerging in the global media, we were able to draw some conclusions and predictions based on GDP and unemployment data. It is clear that the SME globally has been hit the most, but an assessment on how severe the damage has been, might be more accurate if we wear the spectacles of the day to day life.
News from China is showing how the economy has already started picking up, with a forecasted GDP growth of 1.2 per cent in 2020. This number shows again the economic might of China. Despite the crisis and the lockdown, the economy has already restarted galloping. It is estimated that over the next 5 years, China will grow steadily at least 5 per cent annually. The internal demand is the drive for such growth, as nearly 60 per cent of the economy is pulled by the 1.5 billion population. However, for the Chinese economy to pick up again, a price had to be paid. It is known that many SMEs have cut salaries in order to remain profitable, therefore less spending power in the hands of the middle class employed in SMEs. How this will reflect in the number to come is still unknown, but we can imagine a slower retail consumption as well as a higher trade and industrial output.
In the US, unemployment numbers are encouraging. After a 15 per cent peek in April this year, July has shown a 4.8 per cent improvement in jobs data. According to the latest figures released, the employment rate is presently at 10.2 per cent. This could have a positive impact in the retail sector, as more middle class individuals and families will regain spending power. However, it is not possible to make a clear projection, as unemployment data is quantitative only on the number of people employed, not on their salary. If these individuals went back to work with a much lower salary, then the retail potential would be impacted significantly.
Talking about Nigeria, the 7th largest country in the world, the combined data unemployment and underemployment (when the employment does not provide enough income to rise above the poverty line) hit a record high 55.7 per cent last month. Unemployment is at 27.1 per cent with close to 22 million jobless Nigerians. It is alarming that unemployment is rapidly increasing among the youth. In the past this would have caused unemployed individuals to venture overseas in search of jobs, but due to the COVID-19 travel restrictions, this option has become impossible.
Looking close to home, in the Middle East and more specifically in Oman, unemployment has been on a positive decline over the past few years. In the Sultanate we moved from 3.27 per cent unemployment in 2015 to 2.67 per cent in 2019. Oman is working hard to keep improving in times of economic distress. Some of the measures aimed to help Omani people to get more jobs have been rolled out earlier this year and begun yielding results.