Covid-19 - Now what? - Recovery or Recession.
Covid-19 - Now what? - Recovery or Recession.
Several trends indicate that global economy is recovering. After almost 2 months of the lockdown, most countries in the world are reopening. Economic confidence is returning and people are getting back to work. Let us look at top-10 indicators that point towards global economic recovery after Covid crisis:
1) South Korea:
The world should look to South Korea’s handling of the coronavirus outbreak as a way to emerge from the pandemic without severely affecting economic growth, one economist told CNBC on Thursday. South Korea saw a rapid increase in cases starting late February when the flu-like disease spread rapidly among members of a religious group. By mid-April, daily reported cases of infection fell well below 100. The country embarked on mass testing efforts and strict social isolation measures but didn’t totally shut down businesses. As a result, it managed to contain the virus outbreak without suppressing economic activities, said Trinh Nguyen, a senior economist at French investment bank Natixis.
https://www.youtube.com/watch?v=wPdUx7C05T0
2) Sweden:
On May 8, Swedish state epidemiologist Anders Tegnell gave an interview via Zoom from a parked car. The hot pink cord of the earbuds plugged into his phone flapped distractingly in the foreground. Before this year, it would’ve been hard to scare up 10 journalists to listen to him or any other epidemiologist, but Tegnell drew 450 reporters and other curious people from 60 countries. An additional 10,000 have since listened to the recording of the colloquy with Joyce Barnathan, president of the International Center for Journalists. The next few weeks or months will tell whether Tegnell’s strategy is brilliant or—as many experts outside of Sweden believe—benighted. The Swedish government has deferred to him and his fellow scientists to set the rules for a relaxed semi-shutdown of Swedish society in response to the Covid-19 pandemic. Gatherings of more than 50 people are banned, but Swedes have continued eating in restaurants, shopping, going to work, getting haircuts, and sending children under 16 to school. Few Swedes wear masks. Bloomberg Economics expects the economy to shrink 5.6% in 2020, vs. 8.1% for the nations of the euro zone.
3) Europe:
After weeks of social isolation, many European countries, which believed the coronavirus curve has flattened, are now relaxing control measures. On Wednesday, Italian Sports Minister Vincenzo Spadafora announced gyms and fitness centers may reopen on May 25. The announcement came amid the country's improving epidemic situation, with the number of active infections down by 2,809 to 78,457 on Wednesday. According to the Civil Protection Department, recoveries have now made up over 50 percent of all cases. On May 4, the country partially lifted a nationwide lockdown imposed on March 10, allowing manufacturing, construction and wholesale sectors to resume business. Retail shops, museums, galleries and libraries will reopen from May 18, and bars, restaurants, hairdressers and beauty salons from June 1.
France registered on Wednesday a total of 21,071 patients hospitalized for COVID-19 infections, down by 524, with 2,428 in need of life support, down by 114. The country on Monday started gradually lifting its lockdown. With the positive development in containing COVID-19, Switzerland announced on Wednesday its plans to reopen its borders with France, Germany and Austria on June 15.
https://www.xinhuanet.com/english/2020-05/14/c_139056712.htm
3) Treatment:
Remdesivir’s potential first drew public attention in October 2015 during an Ebola outbreak in West Africa that claimed more than 11,000 lives. The U.S. Army Medical Research Institute of Infectious Diseases announced that, in partnership with the biopharmaceutical company Gilead Sciences, it had found the first small-molecule drug that protected infected rhesus monkeys from the deadly effects of Ebola. GS-5734 (remdesivir’s original name) was a fine-tuned version of a compound from Gilead’s libraries that was concocted to treat other viruses. A CDC screen of 1,000 possibilities had established its broad-spectrum activity. In cells in the lab, it hampered not only Ebola viruses but also several others, including the coronavirus that caused MERS. Remdesivir subdues a virus by interfering with replication—the way a virus copies itself. It’s a common strategy among broad-spectrum antivirals because the enzymes involved tend to be conserved across many types of viruses. For example, the genetic sequences of coronaviruses’ RNA polymerases are at least 70 percent identical. By contrast, the genetic code behind the “spike” that helps coronaviruses invade host cells varies more widely, Baric says.
4) Vaccine:
The World Health Organization chief said Monday there are around seven or eight “top” candidates for a vaccine to combat the novel coronavirus and work on them is being accelerated. WHO Director-General Tedros Adhanom Ghebreyesus told a UN Economic and Social Council video briefing the original thinking two months ago was that it may take 12 to 18 months for a vaccine. But he said an accelerated effort is under way, helped by 7.4 billion euros ($8 billion) pledged a week ago by leaders from 40 countries, organizations and banks for research, treatment and testing.
https://www.timesofisrael.com/who-says-there-are-7-or-8-top-candidates-for-a-covid-19-vaccine/
5) Govt. Economic Stimulus Package:
Governments and central banks around the world have unleashed unprecedented fiscal and monetary stimulus and other support for economies floored by the coronavirus pandemic. The G20 said on March 26 it would inject more than $5 trillion into the global economy to limit job and income losses and “do whatever it takes” to tackle the pandemic.
6) China:
China's economic activities are picking up the pace of resumption, as shown by several leading indicators including the number of cargo volume, power generation and consumption, and excavator sales, reported Economic Information Daily Thursday. Data from the China Academy of Transportation Sciences showed that cargo transport rebounded to the previous average level in April as economic activities are accelerating restoration nationwide. In the period, the China Transportation Services Index stood at 131.5 points with the contraction narrowing 6.6 basis points from the previous month, and the sub-index for cargo transport fell 1.2 percent from a year ago. In another sign of recovery, daily electricity generation edged up 1.17 percent year on year last month to 18.21 billion kilowatt-hours, seeing a monthly growth of 3.01 percent. Amid the positive trend for the epidemic containment, growth momentum is also gathering in electricity consumption, which is expected to rise by 2 percent in April from the previous year, according to the State Grid Energy Research Institute.
https://www.xinhuanet.com/english/2020-05/14/c_139056555.htm
7) Epidemiologist Projections and Models:
One month after the first case of the coronavirus was reported in the United States, Nicholas Reich, a professor of infectious-disease modeling at the University of Massachusetts, Amherst, and Thomas McAndrew, a postdoctoral fellow at the university, started surveying their colleagues on how the virus might unfold in America.
The results also indicate that experts expect a grim death toll — somewhere in the range of 195,000 deaths in the U.S. by the end of the year. (The seasonal flu, by contrast, causes between 11,000 and 95,000 deaths every year. That figure, while massive, is less than one-tenth the number of deaths estimated in a worst-case-scenario model from Imperial College in London — the one that reportedly spurred the Trump administration into action. That report suggested that, without intervention, the coronavirus could cost 2.2 million lives in the U.S. (One of the senior authors of that report is a participant in the expert survey.)
More than 82,000 people in the United States have died of COVID-19 as of Tuesday. How many more lives will be lost? Scientists have built dozens of computational models to answer that question. But the profusion of forecasts poses a challenge: The models use such a wide range of methodologies, formats and time frames that it's hard to get even a ballpark sense of what the future has in store.
Enter Nicholas Reich, a biostatistician at University of Massachusetts Amherst. Reich and his colleagues have developed a method to compare and ultimately to merge the diverse models of the disease's progression into one "ensemble" projection. The resulting forecast is sobering. By June 6, it projects, the cumulative death toll in the U.S. will reach 110,000.
Last month, a group of Stanford University researchers released a remarkable study: Covid-19 infections in Santa Clara, Calif., might well be 85 times higher than official estimates. The fatality rate for coronavirus might be as low as 0.12 percent, the researchers concluded, which would make Covid-19 only as deadly as the seasonal flu.
https://www.nytimes.com/2020/05/14/opinion/coronavirus-research-misinformation.html
8) Rising Business Confidence & Surging Stock Market:
With the stock market rallying sharply off its March 23 low, the usual cries have started: stocks are missing the economic reality, they're whistling by the graveyard, they're completely divorced from economic fundamentals.
9) Unexpected Benefits of lockdown:
The plunging demand for oil wrought by the coronavirus pandemic combined with a savage price war has left the fossil fuel industry broken and in survival mode, according to analysts. It faces the gravest challenge in its 100-year history, they say, one that will permanently alter the industry. With some calling the scene a “hellscape”, the least lurid description is “unprecedented”.
A key question is whether this will permanently alter the course of the climate crisis. Many experts think it might well do so, pulling forward the date at which demand for oil and gas peaks, never to recover, and allowing the atmosphere to gradually heal.
The fast-moving coronavirus pandemic has forced millions of Americans to work from home, with no immediate end in sight. Dates for when employees will return to office buildings move later and later or remain uncertain for many companies.
On Tuesday, Twitter told its employees that many of them will be allowed to work from home in perpetuity, even after the pandemic ends. The move signaled a growing shift in attitudes in certain industries toward remote working — a change that could have lasting implications.
Gallup data from the end of April showed that 63 percent of U.S. employees said they had worked from home in the past seven days because of coronavirus concerns, a number that had doubled from 31 percent three weeks before.
10) Humanity has dealt with many pandemics in the past:
Projections about how COVID-19 will play out are speculative, but the end game will most likely involve a mix of everything that checked past pandemics: Continued social-control measures to buy time, new antiviral medications to ease symptoms, and a vaccine. The exact formula—how long control measures such as social distancing must stay in place, for instance—depends in large part on how strictly people obey restrictions and how effectively governments respond. For example, containment measures that worked for COVID-19 in places such as Hong Kong and South Korea came far too late in Europe and the U.S. “The question of how the pandemic plays out is at least 50 percent social and political,” Cobey says.
https://www.scientificamerican.com/article/how-the-covid-19-pandemic-could-end1/
What do you feel does this trend indicate?
Going forward do you see recovery or recession?
Please share your ideas and feedback.