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Restrictions against the third wave of Covid will be little noticeable in GDP … for now



The unstoppable increase in Covid-19 infections in Europe, it has led many countries to increase restrictions and enact new closures in an attempt to slow the upward curve. For example, Germany he already values ​​extending the hard confinement until March or April, Portugal has lengthened it for another month and France it has extended the curfew across the country. In Spain, the CCAA do not stop taking measures to try to contain the contagions. Will all this affect the expected GDP rebound?

The panorama in the Old Continent at the beginning of 2021, which some define as "the year of recovery", it is not at all flattering. Although many experts believe that Containment measures that are being adopted to curb the third wave of the coronavirus will be little noticeable in the economy, at least for now.

"Although the restrictions are almost as strict as they were during the spring of last year, the impact on GDP in the fourth quarter of 2020 and the first quarter of 2021 combined should be much more modest than in the first half of 2020", point out Berenberg analysts, who believe that this new wave of infections" is not such an unpleasant surprise ", since" supply chains continue to function and vaccination raises hopes of a strong rebound from spring " .

They believe that "the direction of travel is even stricter", given the increase in infections that is putting European health systems on the ropes, they are almost at the limit, so that the most significant measures "will remain until well beyond January ". In some countries, these analysts point out, the gradual reopening "may begin sometime in February", although in others "that may not happen before March."

Hence, the German firm believes that it is most likely that we will see "a darker winter and a brighter spring". "The setback we project for this winter should be partially offset by a faster recovery from spring," they insist, so they believe that the effect of the restrictions on GDP will be moderate.

But what if the governments end up surrendering to the total closure because the advance of the virus leaves no other way out? Then things could be very different, even as the Covid-19 vaccination continues to advance. As Pantheon Macroeconomics highlights, the big question now is whether or not what is happening will delay the recovery of the Eurozone. "Economists are pondering whether it is time to lower growth forecasts", recognize the experts of this firm.

"We are confident that the major economies will defeat the virus this year, but risks have arisen that it will take longer than initially expected," as the restrictions must be added to the slow deployment of vaccination, which could even get worse now what Pfizer has announced that it will cut shipments of its vaccine to Europe for a time. "The consensus view that the economy will be on an unhindered path to recover from at the beginning of the second quarter is now under threat," Pantheon experts say, and so they believe that forecasts are likely to need to be changed.


The global death toll from the coronavirus pandemic is nearing 2 million, and there is little expectation that the death toll will slow in the near future. It is clear that further action must be taken to try to stop this trend, although closings may not be the best decision.

This is what a recent study made by a group of researchers from Stanford University, which says the closures have been no more helpful in slowing the spread of the virus than measures taken voluntarily by citizens, such as social distancing or reducing travel. The conclusion was drawn after analyzing the evolution of the pandemic in 10 countries (on the one hand England, France, Germany, Iran, Italy, the Netherlands, Spain and the United States, which adopted mandatory confinement and the closure of businesses, and South Korea and Sweden, which implemented less severe and voluntary responses), with the aim of verifying the effect that more or less restrictive measures had on changing individual behavior and reducing the transmission of the virus.

And after that the researchers have determined, according to Newsweek, that there is "no clear and significant beneficial effect of the more restrictive measures on the growth of cases in any country." "We do not question the role of all public health interventions, or coordinated communications on the epidemic, but we did not find an additional benefit in requests for people to stay at home and in business closings", concludes the team.

It should be noted that the effectiveness of lockdowns has been a hotly debated issue since the beginning of the pandemic, and while this study claims there is no significant benefit, others have noted that the lockdowns have saved millions of lives. For example, Reuters echoed a study published by researchers from the Imperial College London in June it determined that some 3.1 million deaths had been averted thanks to closures across Europe at the start of the pandemic. And other research has revealed that 530 million coronavirus infections were averted thanks to closures in China, South Korea, Italy, Iran, France and the US.

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