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The report claims that their economy will take a 17% hit in the first half of 2020 (it has already taken this hit, but it takes a while for the accounting to sh

by parsimo2010 6y ago

The report claims that their economy will take a 17% hit in the first half of 2020 (it has already taken this hit, but it takes a while for the accounting to shake out). And they're claiming that the yearly hit will only be 8.3%. I understand that they are trying to take a lot of things into account, but this forecast is too optimistic. Europe won't bounce back that much in H2, because their recovery will only happen at the pace of everyone else's recovery.

simonh 6y ago
I agree it's optimistic, it assumes no second wave which is actually already happening and is sure to happen elsewhere in the world too.
- WinstonSmith84 6y ago
  Nothing proves that a "real" second wave will come with a similar lockdown to the first one. The first lockdown was catastrophic for the economy of some countries and didn't really help anything at all in regard to the health (best example is France/Spain vs. Germany). It seems (some) countries have learnt the lessons and now apply successfully limited restrictions (masks, social distancing, limited gathering, etc.) and this shall be the sweet spot for limiting contamination while not impeding further the economy. Arguably one shall not, again, underestimate governments for self-sabotaging themselves, but we can hope to see more reasonable measures being undertaken.
  - autokad 6y ago
    > "Nothing proves that a "real" second wave will come with a similar lockdown to the first one." I dont know about similar lockdowns, but its reasonable to be concerned about a 2nd winter wave. We seen what happens once winter time comes in Brazil
    - mercer 6y ago
      Let's hope Covid took Bolsonaro by then and his replacement isn't somehow worse...
  - sveme 6y ago
    > didn't really help anything at all in regard to the health (best example is France/Spain vs. Germany) I believe France and Spain were simply already much further on the wave than Germany when they enacted the lockdown. Without the lockdown, things would have probably been much worse.
  - simonh 6y ago
    Germany managed the outbreak better because it was able to do 5x to 10x more testing than any other country, due to the global medical testing industry being mostly located in Germany. This enabled them to closely track the progress of the virus and employ targeted tactical lockdowns. Germany did lock down, just not as completely. Spain and France didn't have that option, they could only employ blanket lockdowns. Of course now we have ramped up our global testing capacity and German style tactical lockdowns are becoming more feasible, but they aren't a magic wand. Even Germany is forecast to suffer a 7% hit to it's economy through 2020 while the hit to Spain may be double that. So hopefully further lockdowns wont be as blanket and damaging as the first wave, but they will still have an impact. If you think the lockdowns didn't have any effect on transmission of the virus, how do you explain the reduction in cases during the lockdowns?
andy_ppp 6y ago
I think it all depends on the size of the stimulus right? If every citizen receives a bundle of cash capitalism might be saved yet!
berkes 6y ago
> Europe won't bounce back that much in H2, because their recovery will only happen at the pace of everyone else's recovery. The EU does have the worlds' largest internal market, though. I am not an economist, but would expect this dampens the effect of economies elsewhere breaking down.

simonh 6y ago

I agree it's optimistic, it assumes no second wave which is actually already happening and is sure to happen elsewhere in the world too.

WinstonSmith84 6y ago
Nothing proves that a "real" second wave will come with a similar lockdown to the first one. The first lockdown was catastrophic for the economy of some countries and didn't really help anything at all in regard to the health (best example is France/Spain vs. Germany). It seems (some) countries have learnt the lessons and now apply successfully limited restrictions (masks, social distancing, limited gathering, etc.) and this shall be the sweet spot for limiting contamination while not impeding further the economy. Arguably one shall not, again, underestimate governments for self-sabotaging themselves, but we can hope to see more reasonable measures being undertaken.
- autokad 6y ago
  > "Nothing proves that a "real" second wave will come with a similar lockdown to the first one." I dont know about similar lockdowns, but its reasonable to be concerned about a 2nd winter wave. We seen what happens once winter time comes in Brazil
  - mercer 6y ago
    Let's hope Covid took Bolsonaro by then and his replacement isn't somehow worse...
- sveme 6y ago
  > didn't really help anything at all in regard to the health (best example is France/Spain vs. Germany) I believe France and Spain were simply already much further on the wave than Germany when they enacted the lockdown. Without the lockdown, things would have probably been much worse.
- simonh 6y ago
  Germany managed the outbreak better because it was able to do 5x to 10x more testing than any other country, due to the global medical testing industry being mostly located in Germany. This enabled them to closely track the progress of the virus and employ targeted tactical lockdowns. Germany did lock down, just not as completely. Spain and France didn't have that option, they could only employ blanket lockdowns. Of course now we have ramped up our global testing capacity and German style tactical lockdowns are becoming more feasible, but they aren't a magic wand. Even Germany is forecast to suffer a 7% hit to it's economy through 2020 while the hit to Spain may be double that. So hopefully further lockdowns wont be as blanket and damaging as the first wave, but they will still have an impact. If you think the lockdowns didn't have any effect on transmission of the virus, how do you explain the reduction in cases during the lockdowns?

andy_ppp 6y ago

I think it all depends on the size of the stimulus right? If every citizen receives a bundle of cash capitalism might be saved yet!

berkes 6y ago

> Europe won't bounce back that much in H2, because their recovery will only happen at the pace of everyone else's recovery. The EU does have the worlds' largest internal market, though. I am not an economist, but would expect this dampens the effect of economies elsewhere breaking down.