Share of services in GDP of Top-20 economies of the world
The coronavirus COVID-19 pandemic has led to an unprecedented crisis in the global economy. To varying degrees, all regions of the world have been affected. The services sector is most affected: the tourism business is paralyzed, restaurants and hotels are closed, the mass entertainment and shopping industry suffers; air transportation decreased significantly.
There is a growing perception of the forthcoming problems size. According to the forecast of the American investment company Morgan Stanley, the US economy in the II quarter of 2020 will decline by an unprecedented 38%, and the real GDP will shrink 5,5% by the year end, the steepest drop since 1946.
Christine Lagarde, chairperson of the European Central Bank (ECB), believes that the restrictions introduced to combat the pandemic can lead to a reduction in the EU economy by 5%.
The International Monetary Fund (IMF) predicts a 5,5% drop in Russia's GDP this year. So far, this figure does not exceed the shock of the 2009 crisis, when the Russian GDP fell by 7,8%.
Existing estimates are likely to be reviewed more than once, since humanity has not yet reached the peak of the pandemic, therefore, the real damage will be understood later. Nevertheless, it may be concluded that countries with high share of services in GDP will suffer the most.
Among Top-20 countries with the largest economy, the US have the highest share of services in GDP exceeding 77%; it is 71% in the UK, and 70% in France (see Table 1).
The share of services in the GDP of Russia is less - 54%, in China - 52%, and in India - 49%.
|Rank||Country||Service in GDP, %*||National GDPs at PPP, trillion USD, 2019**||Position by GDP|
|2||United Kingdom||71,0||3 131||9|
|15||Republic of Korea||53,6||2 320||14|
|19||Saudi Arabia||48,4||1 899||17|
* Share of services in value added of GDP. Source: World Bank - World Development Indicators
** Source: INF - World Economic Outlook Database
Countries with their own industry and developed agriculture, independent of seasonal workers and foreign markets, will be less susceptible to the crisis. During the pandemic, industrial goods and food are of prime importance, and entertainment, leisure and shopping are transferred to the category of deferred demand.