Coronavirus lockdowns are lifting and economies are reopening, but the hard work of recovery has only just begun

Name: Tests on nearly 10 million people in Chinese city of Wuhan turn up only 300 coronavirus cases
Uploaded: 2020-06-05T13:00:15.000Z
Duration: 1 min 54 s
Description: Tests on nearly 10 million people in Chinese city of Wuhan turn up only 300 coronavirus cases

Governments across the world are cautiously allowing businesses to reopen and removing pandemic restrictions in steps

The second stage of recovery will be more difficult and may have to contend with some lingering economic damage amid US-China tensions

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People dance to music at the Trocadero Human Rights Plaza near the Eiffel Tower in Paris on June 2. France has started a gradual lifting of Covid-19 lockdown restrictions in an effort to restart its economy and help people get back to their daily routines. Photo: EPA

Tai Hui

Published: 9:00pm, 5 Jun 2020Updated: 9:18pm, 13 Oct 2020

The global economy is crawling back to its feet, but returning to full health will take longer. Disrupted by Covid-19, it is facing its deepest recession since World War II. The good news is that we are starting to see many economies reopening and can anticipate a two-stage recovery process.

We are probably at the start of the first stage of recovery from Covid-19 and getting back to some form of normality. However, to eventually rebound to full strength, we will need a vaccine or at least efficient and accurate tests. This is going to take time.

The United States and European economies were already in contraction in the first quarter. The second quarter is likely to get worse with the full impact from the lockdown reflected in the economic data. Covid-19 shutdowns have been devastating to the service-sector industries like food and beverage, entertainment, travel and leisure and retail.

These industries make up a sizeable share of the developed world’s economy. Coming to a standstill means US economic activity could have dropped by as much as 30 per cent in the span of three months.

With the rate of new infections slowing in Asia, Europe and the US, governments are allowing businesses to reopen gradually. In Europe, countries such as Italy, Germany and Britain are removing the lockdown in steps, easing stay-at-home orders and allowing some non-essential businesses to resume.

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Tests on nearly 10 million people in Chinese city of Wuhan turn up only 300 coronavirus cases

In the US, some states are reopening to limit damage to their economies. The good news is that a second wave of infection has not appeared yet; this will be a critical condition for this first stage of recovery to continue.