Cautious optimism and confidence in recovery
The lifting of coronavirus lockdown measures too early could spark a resurgence in infections, warned the head of the World Health Organization Tedros Adhanom Ghebreyesus on the eve of Easter and other religious holidays around the world (Buddhist New Year, Newroz, start of Ramadan). According to WHO, it is better to remain cautious about easing restrictions, even as all countries struggle with the economic impact of the virus. Although Tedros mentioned the “welcome slowing” of the epidemic in some European countries during a virtual press conference, he concluded, “the way down can be as dangerous as the way up if not managed properly.”
The difficulties for the world economy were summarized by the Director-General of the WTO, Roberto Azevedo, in a public meeting (the full speech can be read here https://www.wto.org/english/news_e/spra_e/spra303_e.htm), where he outlined a possible future scenario which, in the most optimistic case, would see the volume of global merchandise trade fall by 13% this year compared to 2019; a decline which – if the pandemic is not brought under control, and governments fail to implement and coordinate effective policy responses, could be 32% – or more. “Comparisons with the financial crisis of 2008 and even the Great Depression of the 1930s”, said the D-G, “are inevitable.” According to Azevedo, however, today the banks are not undercapitalized and the economic engine is in good shape: if the pandemic has cut the fuel line to the engine, he added with a metaphor, this means that, “if the fuel line is reconnected properly, a rapid, vigorous rebound is possible.” “A strong rebound is more likely if policymakers show businesses and households reason to believe the pandemic was a temporary, economic shock. To do this, fiscal policy, monetary policy, and trade policy must all pull in the same direction. A turn towards protectionism”, he added, “would introduce new shocks on top of those we are currently enduring. Keeping markets open to international trade and investment would help economies recover more quickly.”
Meanwhile, efforts to update data and provide reliable information are ongoing by institutions, research centres, and universities. The World Bank’s initiative can be found at http://datatopics.worldbank.org/universal-health-coverage/covid19/, entitled: Understanding the Coronavirus (COVID-19) pandemic through data, an effort to provide a gateway to quickly get the information required (including by the public). “Data”, writes the WB in its introduction to the project, “is critical to support countries in managing the global coronavirus pandemic. This site provides an array of real-time data, statistical indicators, and other types of data that are relevant to the coronavirus pandemic. These data are drawn from the World Bank’s data catalogue and other authoritative sources.” The page is updated frequently as more data and research become available, particularly on the economic and social impacts of the pandemic and the World Bank’s efforts to address them.