AGENCIES, Washington: The unprecedented coronavirus pandemic has taken world economies for a toss and governments around the world are wrestling with when and how to lift economically painful virus-control measures as unemployment rises among other unpleasantries. Painful situations call for painful decisions and this is just the beginning.
On one hand, most affected countries have mandated strict restrictions on movement to try to stop the spread of a new coronavirus that has infected more than 2.2 million people and for which there is no vaccine till now.
Impatience and frustration is also growing among the populace. Several states in the US saw protesters coming on to the streets, defying lockdown guidelines and demanding economy-strangling restrictions to be taken off.
Economists predict US GDP growth will slow to 2.0% in 2020 from 2.2% in 2019. It will be 1.9% in 2021 and 1.8% in 2022. US factory output slumped in March by the most since 1946 as manufacturing activity was halted by the coronavirus lockdown.
Top leaders of China’s ruling Communist Party called for deficit spending and a more flexible monetary policy after the economy shrunk 6.8 per cent in the first three months of the year.
The UK on Friday recorded 847 coronavirus deaths in hospitals, raising the overall COVID-19 death toll to 14,576 in the country. The nationwide lockdown imposed to slow the spread of the new coronavirus will remain in place for at least three more weeks. The country’s economy could shrink by 35 per cent in the second quarter of this year and unemployment could hit 10 per cent as coronavirus lockdown measures take a devastating toll, Britain’s budget watchdog has warned.
South Korea has revised its growth forecast real GDP to contract by 1.8% in 2020, from 2% growth in 2019.
Most governments remain cautious, even as the economic toll rises. Public health experts warn that easing shutdowns must be accompanied by wider testing and tracing of infected people to keep the virus from coming back. However, it remains to be seen whether the leaders will buckle under pressure and take the risk to try and kick-start their respective economies despite the huge risk associated with it in today’s context.