COVID-19 brings economic uncertainty, cautious optimism for recovery

Business shutdowns, reduced services, and daily announcements of more money allocated towards the issue have many concerned about the economic impacts of COVID-19. Despite this, Beedie School of Business professor Andrey Pavlov maintains cautious optimism.

“I think the long-term picture is good,” says Pavlov. “We have fantastic technological advancements that were generating very high rates of growth before the virus, and there is no reason to believe this will change.”

Businesses beginning to move towards online and remote services will help maintain the flow of capital and help cushion economic blows. The pandemic may also push companies to develop and adapt further to new technologies, speeding up the eventual economic recovery.

Pavlov says with more companies and organizations working from home, we will likely see a technological boom.

And while stock market plunges in the pandemic’s early stages indicated a looming economic downturn, Pavlov says Pavlov says these plunges resulted from people reacting to new information and to uncertainty. In fact, he says, this is natural and indicates an active market.

“We’re going to get out of this, and this will be an opportunity to develop a portfolio of stocks and bonds that serves your needs.”

This includes creating a more conservative portfolio for those closer to retirement, and a more aggressive portfolio for those who are not.

Small businesses, which are significantly impacted by the COVID-19 pandemic, will play an important role in the economic recovery, but will need some help to make it through these times.  

This is particularly true in British Columbia, where 98 per cent of businesses are small, and play a large role in B.C.’s economic development.

Pavlov recommends revised tax policies and cuts to help see small businesses through the crisis, and to help set them up for economic growth going forward.

Although Pavlov recognizes there will be an immediate economic downturn, he advises we keep the long-term picture in mind, saying this is an opportunity for overall growth and improvement.

“It’s really important to think about what each one of us can do so that the recovery, when it arrives, is strong and fast,” says Pavlov. “So that we get back not only to the previous economy and society, but we get to a better place. I think we have an opportunity to do that.”