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Updated: October 8, 2020 8:43:25 pm
People wearing protective masks leave the Brighton Beach subway station in the Brighton Beach neighborhood of the Brooklyn borough of New York, USA, on Monday, October 5, 2020. Governor Andrew Cuomo said the New York City public and private schools at viral hotspots are due to close Tuesday, threatening to shut down religious institutions if members don’t follow rules on masks and social distancing. The IMF report calls for reconsideration of the idea that lockdowns imply a compromise between the lives of savings and supporting the economy. (Bloomberg)
Lifting the locks is unlikely to lead to a decisive and sustained economic boost as long as Covid-19 infections remain high, because people will likely continue to avoid social interactions for fear of contracting the virus, the International Monetary Fund said.
New IMF research shows that while government lockdowns contributed significantly to the global recession, the slowdown was also driven largely by people who continued to exercise voluntary social distancing, the fund said in a blog post Thursday, accompanying a chapter in your World Economic Outlook update. . The fund will release new forecasts on October 13 during its annual meeting with the World Bank.
The findings, using high-frequency mobility data from Alphabet Inc.’s Google and job postings from Indeed Inc., should warn lawmakers against lifting locks amid elevated infections in hopes of boosting economic activity. said the IMF. The findings call for reconsidering the idea that the locks imply a trade-off between the lives of savings and supporting the economy, the fund said.
“Addressing health risks appears to be a precondition for enabling a strong and sustained economic recovery,” wrote IMF economists Francesco Grigoli and Damiano Sandri.
The IMF and World Bank will hold their annual meetings next week, moving to a virtual format due to the outbreak instead of their usual in-person meetings in Washington. While the IMF will do a small upward revision to its 2020 forecast and the global outlook is less dire than three months ago, the recovery will be long and uneven, Managing Director Kristalina Georgieva said earlier this week.
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