COVID-19 growth roadmap: are we ready to re-open?

The pace of new daily COVID-19 cases has peaked in most advanced economies. Mobility data indicate restrictions measures were at their most stringent in early April, and many markets are now easing lockdown. The stringency of lockdown correlates strongly with the degree of decline in economic activity in the first quarter. We see the economies of China, Australia and Germany as most resilient to the lockdown shock. Arguably, the current momentum for re-opening is more politically-driven than by advances on the pandemic curve. This could risk a second-wave of infections, which in turn could jeopardize economic recovery.

Key takeaways

  • The curve of new COVID-19 infections has peaked in most advanced economies, although the US and UK lag.
  • The peak of activity restrictions occurred in early April in most advanced economies.
  • The magnitude of restrictions was directly correlated to the drop in first-quarter GDP growth.
  • We see China, Australia and Germany as most resilient to the negative shock from the shutdowns.
  • Several large emerging economies are still on the upward trajectory of the pandemic curve.
  • Political pressure can lead to premature re-opening; this heightens the risk of flare-ups or second waves and could also disrupt economic recovery.

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Economic Insights COVID-19 growth roadmap: are we ready to re-open?

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