How governments are holding on to the fragile recovery as fresh Covid-19 infections batter economies
- Recovery may be delayed but is unlikely to be derailed with more fiscal stimulus coming, low interest rates, targeted lockdowns, and businesses finding creative ways to operate
But instead of derailing the global economy and forcing another dip in economic activity, the latest outbreaks are more likely to dampen and delay a full recovery.
As the waves of outbreak roll on, economic recovery is losing momentum. High-frequency mobility data shows that the latest outbreak across the US has forced the public to cut back on activity as several states halted plans to reopen or reintroduced lockdown measures. The data may also decline in Spain as more social distancing policies return, and the rest of Europe could follow the same path.
Against this backdrop, the first stage of recovery from the sharp recession in April and May, facilitated by generous government stimulus and early successes in flattening the infection curve, is beginning to stall.
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There may never be a 'silver bullet' for coronavirus, WHO chief says
There are grim choices facing policymakers as they weigh up prospective economic losses against the measures necessary to fight the virus contagion and keep their public health systems from being overwhelmed. None of these trade-offs will be easy.