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With around 250,000 new cases per day approximately, the global number of infections could exceed 50 million by the end of 2020. Forecasting the magnitude of the victims of the pandemic, Eric Topol, director of the Scripps Research Institute of Research in California, said in mid-June: “We will soon reach a million.” Currently, the number of deaths from coronavirus worldwide is approximately 685,000, according to data from Johns Hopkins University.
Until a safe and effective vaccine is discovered, it waits for a time of serious challenges, with particularly severe testing predicted in the United States and Brazil, said Michael Oesterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota. The same jump in infections per day recorded during the US Remembrance Day holiday could be repeated during Labor Day when schools open their doors, he said.
“I think the spread of the virus will increase dramatically, especially among adults and those at risk,” he said. – And then the flu season will begin, when the spread of the virus is likely to be exacerbated by any indoor activity. If we put it all together, it wouldn’t be a very pretty picture. “
At a time when governments face new tipping points and reintroduce full or partial quarantine, the prospect of a rapid global economic recovery is still obscure this year, economists and executives say.
Although the world affected by the virus is now in a better position than in April and May, when the almost total quarantine to prevent the spread of the virus gave a powerful blow to economies, new outbreaks or sudden outbreaks in previous outbreaks disrupted activity. economic enough to slow vigorous growth.
While waiting for the vaccine
Data on, for example, restaurant reservations and job vacancies have remained stable or on a downward trend in some economies.
The highly contagious virus is expected to remain a gay and elusive opponent until the first generation of effective vaccines is introduced to the public, which many experts expect no sooner than 2021.
In the United States, Federal Reserve (Fed) President Jerome Powell said last week that “the increasing number of infections and renewed controls are already putting pressure on economic activity,” pointing to signs such as lower consumer consumption based on debit and credit cards, and the decline in labor market indicators in the small business sector.
The United States announced one of the country’s biggest economic contractions on Thursday: the US gross domestic product (GDP) contracted 32.9 percent in the second quarter of this year, during the height of the coronavir pandemic , compared to a similar quarter last year.
Some analysts were more concerned about another aspect: The number of Americans applying for unemployment benefits for the first time increased for the second consecutive week, at a time when emergency benefits were around $ 30 million. the unemployed had to expire in late July. Congress disagrees on whether to extend the largest unemployment benefits and direct benefits to Americans, and if so, for how long.
In other parts of the world, where the virus appears to be under control, new outbreaks continue to occur. China has reported an increase in infections in northwest Xinjiang. The United Kingdom reintroduced restrictions in the northern parts of England after a new outbreak of cases a few weeks after the country attempted to open up.
Anxiety in Europe
The increase in infections in Europe has led governments to impose new travel and social restrictions; For example, the United Kingdom has announced that all travelers returning from Spain, where the number of infections has increased considerably, should be quarantined. France, Belgium, Germany and other countries also report alarming increases.
Although unemployment benefits are actually more generous in Europe than in the United States, economic problems seem to be deepening in the euro area. As the economy contracts, the unemployment rate in the region could reach around 10% by the end of the year. limit, according to the Bloomberg survey. According to the latest forecasts, the unemployment rate in the United Kingdom will reach 8%, almost double that of previous years.
Goldman Sachs Group Inc., meanwhile, warned that the Asia-Pacific economy, which in 2019 accounted for more than 70 percent. Global growth reached a turning point in June, when the pace of openness in the region “slowed substantially” and was threatened with serious challenges.
“While early openness is reminiscent of Form V in many areas, and GDP growth in the third quarter will be strong compared to very weak growth in the second quarter, normalization is likely to decline from now on,” said Andrew Tilton, Goldman’s chief regional economist.
Corporate bankruptcies
The pandemic-related business difficulties remain severe, especially in the United States, where more than 160 companies have filed for bankruptcy.
From retailers to restaurants and gyms, various famous companies such as Hertz Global Holdings Inc., J.C. Penney Co. and Ascena Retail Group Inc., which owns the Ann Taylor and Lane Bryant clothing chains.
In late July, after more than half of the Standard & Poor’s 500 index companies released their reports, earnings indicators declined by about 33% compared to the same period last year, according to Bloomberg data. General Motors Co., General Electric Co., Starbucks Corp., and Nike Inc. are among the first high-profile companies to report losses.
Business leaders also note evidence that demand in the US is weakening as the number of COVID-19 cases increases in June. “While early signs of recovery have encouraged us, the past few weeks have shown that the trajectory can be uneven,” said David Calhoin, CEO of Bopeing Co., last week.
Labor court
Thanks to government subsidies and programs, far fewer European companies have gone bankrupt. However, in recent weeks Airbus SE, Commerzbank AG and Burberry Group Plc have been among the top companies announcing actual or potential staff cuts.
On Friday, the Dutch division of Air France-KLM announced that it would cut 4,500 to 5,000 jobs this year and next, from pilots to flight crews and ground services. The pandemic has frustrated airlines’ efforts to pay off their debts.
“Like a tsunami, the entire corona crisis is now devastating them,” said KLM CEO Peter Elbers. “When you become a pillow, stop and start from scratch,” that’s the feeling now, “he said.
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