NATIONS around the world have had to navigate a very difficult route between saving lives and saving economies in the ongoing COVID-19 pandemic.
Lockdowns – restricting all movements of people – have been resorted to so that the virus would not have the normal opportunity to jump from person to person. Many lives have been saved because of the restrictions. But it has been at the expense of great economic losses – big industries slowing, small operations closing down, families running out of food and other basic needs, and national economies contracting to unprecedented levels.
The World Bank (WB) last Monday reported that the world economy has now contracted by 5.2 percent, with all countries suffering economic losses worse than any recession in the last 80 years. It expects the crisis to drive 70 to 100 million people into extreme poverty.
The forecast for the United States economy, the world’s largest, is a contraction by 61 percent; for the Eurozone, by 9.1 percent; for Japan, by 6.1 percent; for Brazil, by 8 percent; for Mexico, by 7.5 percent; and for India, by 3.2 percent.
The World Bank said only China, the world’s second largest economy, may see a modest growth of 1 percent this year. Its slowdown will, however, hinder the recovery of many developing countries which export to China, the WB said.
The World Bank’s assessment of the Philippine economy this year is a contraction by 1.9 percent. Along with Malaysia and Thailand, the Philippines suffered the fastest contraction in economic output in Asia due to disruptions in tourism, trade, and manufacturing in the lockdowns.
Our own National Economic and Development Authority (NEDA), headed by Socioeconomic Planning Secretary Karl Chua, estimates a contraction of the national economy by 2 to 3.4 percent. It expects the economy to start recovering in the third quarter of the year – July, August, September – as the ongoing lockdown restrictions are gradually eased.
But strict health standards continue to be enforced, he said, and any further easing will depend on a system of standards based on the number of COVID-19 cases. If there is a deterioration in the rise of cases, the quarantine restrictions will not be relaxed.
Between saving lives and reviving the economy, the former is still the more important consideration.
