You are here: Home » International » News » Economy
Business Standard

Lifting lockdowns amid high infections won't boost GDP, says IMF

The fund will publish new forecasts on October 13 during its annual meeting with the World Bank

Topics
International Monetary Fund | Coronavirus | Global economy

Bloomberg 

IMF
“Addressing the health risks appears to be a pre-condition to allow for a strong and sustained economic recovery,” IMF economists Francesco Grigoli and Damiano Sandri wrote

Lifting lockdowns is unlikely to lead to a decisive and sustained economic boost as long as Covid-19 infections remain elevated, because people will probably keep avoiding social interactions out of fear of contracting the virus, the Monetary Fund said.

New IMF research shows that while government lockdowns contributed significantly to the global recession, the slowdown was also driven in large part by people continuing to exercise voluntary social distancing, the fund said in a blog post Thursday accompanying a chapter from its updated World Economic Outlook. The fund will publish new forecasts on Oct. 13 during its annual meeting with the World Bank.

The findings, using high-frequency mobility data from Alphabet Inc.’s Google and job openings from Indeed Inc., should warn policy makers against lifting lockdowns amid elevated infections in the hope of jump-starting economic activity, IMF said. The findings call for reconsidering the idea that lockdowns involve a trade-off between savings lives and supporting the economy, the fund said.

“Addressing the health risks appears to be a pre-condition to allow for a strong and sustained economic recovery,” IMF economists Francesco Grigoli and Damiano Sandri wrote.

The IMF and World Bank will hold their annual meetings next week, moving to a virtual format due to the outbreak rather than their usual in-person gatherings in Washington. While the IMF will make a small upward revision to its 2020 forecast and the global picture is less dire than three months ago, the recovery will be long and uneven, Managing Director Kristalina Georgieva said earlier this week.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, October 09 2020. 01:42 IST
RECOMMENDED FOR YOU
.