Impact of COVID-19 Pandemic on Consumer Economy: Countermeasures Analysis

Abstract

The COVID-19 pandemic will change China’s macroeconomic environment in terms of total demand and total supply in the next one to two quarters. The article compares the economic environment at present and that of severe acute respiratory syndrome (SARS) to define the potential influence of the new coronavirus (COVID-19). The potential impact on the macroeconomy includes the slower growth of consumption and investment, fluctuation of prices, and the contraction of export and import. The policy environment will also change in terms of monetary and fiscal policy, which will affect firms’ financing and tax paying. The impact on the consumer economy will be large. First, three modes of the influence on different types of retail industries include moderate, positive, and negative. The epidemic accelerates the revolution of business patterns in China, since the no-man delivery, sinking market, and indoors economy have emerged as the new powers in changing the business models. In general, although the impact of the epidemic on consumption seems comparatively the largest, the “compensatory consumption” can alleviate it to some extent.