Living with lockdowns. Lockdown restrictions have had the effect of turning economic activity off and on. However, as the pandemic has progressed, subsequent lockdowns have been less severe on economic activity than the first. Many businesses have been able to adapt and function throughout lockdowns or pivot into new markets. The trajectory of economic output has largely followed a bungee jump. The initial fall (Q2) and rebound (Q3) will be the most extreme, but subsequent declines and rebounds will moderate.
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Chief Economist’s Weekly Brief – Step by step
A week with cause for cautious optimism. The report card on various countries reopening show no upturn in cases in Western Europe. While a better than expected US jobs report and recovering PMIs in China provide some encouragement. But the damage wrought is extensive. It will be a long, arduous journey through recovery with the risk of setbacks along the way considerable. The rising number of cases in the southern US a prime example.
Continue readingChief Economist’s Weekly Brief – Peaks and troughs
Last month saw an abundance of two things – national variations in how to ease lockdown measures and additional policy support. The latter especially prominent in the EU and Asia’s largest economies (Japan’s additional fiscal stimulus elevated it to the largest in the world). Green shoots followed. But beware famous last words.
Continue readingChief Economist’s Weekly Brief – Bottoming out?
Last week, several economies reopened without a material evidence of a spike in infection rates, well, so far. That said, the northern-southern hemisphere divide in the number of cases continues to widen, leading some (incl. the Fed) to believe that there might be a second wave. Two risks resurfaced – escalation of US-China trade tensions and disruptive Brexit. On the activity front, data for May suggests that the worst might be behind us.
Continue readingChief Economist’s Weekly Brief – Crunch time
We’re heading into a crucial period as countries begin to ease lockdown measures.
Continue readingChief Economist’s Weekly Brief – More of the same
The easing of lockdown restrictions, and with it the economic recovery, looks set to be taken tentative step by tentative step. Witness South Korea having to reintroduce some distancing measures. Meanwhile data is putting more colour on the enormous scale of the economic damage. No surprise that the Bank of England is envisaging the worst downturn since 1706. Even worse than the “Great Frost” of 1709.
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