COVID-19: Reopened too early? A move away from the “sweet spot”

The great shutdown is coming to an end and economic capacity utilisation has rebounded to above 90% of pre-crisis levels. Yet after the initial bounce, a spike in new COVID-19 cases threatens the pace of recovery.

Key takeaways

  • Lockdown easing is creating a bounce-back in many advanced economies to above 90% of pre-crisis capacity utilisation, we estimate.
  • In the US, around 50% of lockdown measures are still in place, according to our new SRI US lockdown index - but easing stalled in July.
  • After narrowing significantly, the US GDP shortfall index is widening again as lockdown easing and mobility pause to manage a resurgence in infection.
  • COVID-19 resurgence has moved the SRI Pandemic Macro Clock away from the sweet spot, and we see a more moderate economic recovery going forward.
  • We continue to expect global GDP to contract by around 4% this year.

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Economic Insights COVID-19: Reopened too early? A move away from the “sweet spot”

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