PARIS: The world’s economic pain was on full display with new bleak evidence on Thursday from Europe and the United States of the mounting devastation wrought on jobs and economies by coronavirus lockdown measures.
In Europe, where over 132,000 people with the virus have died so far, fears about new infection spikes were tempering hopes that economies now on government-funded life support will regain their vigour as workers return to factories, shops and offices.
New unemployment figures covering the 19 European countries that use the shared euro currency underscored how massive job-protection programmes are temporarily keeping millions of Europeans on payroll, sparing them the record-setting flood of layoffs that is battering tens of millions of Americans.
The European economy shrank a record 3.8 per cent in the first quarter as lockdowns turned cities into ghost towns and plunged nations into recession. The drop was the biggest since eurozone statistics began in 1995 and compares to a 4.8 per cent contraction in the United States.
In Europe, fears about new wave of infection dampen hopes that economies will regain their vigour
France’s economy shrank an eye-popping 5.8 per cent, the biggest quarterly drop since 1949. In Spain, the contraction was 5.2 per cent in the same period. In Croatia, the prime minister warned the economy could shrink nine per cent this year as the pandemic keeps tourists away from its Mediterranean beaches and historic sites and he wants European borders reopened.
Germany projects that its economy, the eurozone’s biggest, will shrink 6.3 per cent this year.
No continent is being spared. The Africa Centres for Disease Control and Prevention reported a 37 per cent surge in coronavirus cases in the past week to more than 36,000 confirmed infections and over 1,500 deaths.
In Latin America, Brazil’s virtually uncontrolled surge of coronavirus cases is igniting fears that construction workers, truck drivers and tourists will spread Covid-19 to neighbouring countries that are doing a far better job of controlling the virus.
The Paris-based International Energy Agency projected an unprecedented plunge in the global demand for energy this year, equivalent to losing the entire demand of India, the world’s third-largest energy consumer.
The pain of coronavirus lockdowns has piled pressure on governments to ease them. The World Health Organisation said nearly half of the 44 countries in Europe that restricted people’s movements have started easing them and 11 more will do so soon.
But WHO’s Dr. Hans Kluge noted that Europe still accounts for 46 per cent of virus cases and 63 per cent of deaths globally and remains very much in the grip of this pandemic.
“This virus is unforgiving. We must remain vigilant, persevere and be patient, ready to ramp up measures as and when needed,” he said. Covid-19 is not going away anytime soon.
As economies splutter back to life and workers adapt to the strangeness of new barriers designed to keep them apart, governments are watching infection rates and public behaviour like hawks, wary of a second wave of deaths. German Health Minister Jens Spahn said his government wants to take small steps, rather than risk a big step back.
California’s governor planned to close all beaches and state parks from Friday after people thronged the seashore during a sweltering weekend, ignoring social distancing. Nevada’s governor asked people to stay at home until May 15, but eased restrictions on some outdoor activities and businesses.
In Sweden, authorities spread chicken manure on a city park in Lund to discourage celebrations on Thursday, a traditionally festive day.
The promise of an effective treatment against the coronavirus _ an experimental drug that can speed patients’ recovery _ raised hopes for faster progress in battling the pandemic and restoring wrecked economies and livelihoods.
The US government and others are working to make the medication available to patients as quickly as possible. News of the medical advance lifted world markets, outshining gloomy economic data showing the US economy contracted nearly five percent in January-March in the worst downturn since the 2008 recession.
California-based biotech company Gilead Sciences and the US government reported in a major study run by the National Institutes of Health that the drug remdesivir shortened the time it takes for Covid-19 patients to recover by four days on average from 15 days to 11.
The study, involving 1,063 patients, also showed a trend toward fewer deaths among those on the drug, said Dr Anthony Fauci, the US government’s top infectious diseases expert.
“What it has proven is that a drug can block this virus,” he said. “This will be the standard of care.”
Even though a vaccine is perhaps a year or more away, experts say an effective treatment could have a profound effect on the outbreak. Hopes for the treatment buoyed Asian stocks on Thursday, but Europe’s grim economic numbers weighed on its markets.
The virus has killed nearly 228,000 people worldwide, including 61,000 in the United States, according to a tally by Johns Hopkins University. Confirmed infections globally topped 3.2 million, including one million in the US, but the true toll of the pandemic is likely much higher because of limited testing, differences in counting the dead and concealment by some governments.
The US unemployment rate for April is due late next week, and economists say it could range as high as 20 percent, a level last seen during the 1930s Depression.
Published in Dawn, May 1st, 2020
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