How will economies chart their recovery paths in the wake of Covid – 19?

Key epidemiological data on the pandemic point to important and shared trends across countries, including major differences in national experiences. The pandemic has followed an exponential trajectory, albeit at very different rates around the world. It is also clear that the blocs have “flattened the curve” in infections and deaths in most major economies.

So far, therefore, it seems that a bad situation has improved. However, it seems unlikely that the sharp rise in the pandemic will be followed by a spike and then a sudden and exponential decline in most countries. In fact, while China’s data shows a sharp decline in cases and deaths, every other country seems to have experienced a plateau, hence a trend of gradual decline with ups and downs. Several Asian countries have even experienced secondary waves. These epidemiological factors in turn could slow the economic recovery.

The good news is that all available information suggests that more developed markets (DMs) should be able to withstand moderate backwaves, assuming the virus doesn’t significantly mutate and other important new facts don’t come to light.

Now that the first wave appears to be passing, there are reasons to think that capacity has been improved for personal protective equipment, tests, hospitals and ventilators. All of these factors suggest that a secondary wave should be lower and more manageable than the first.

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