As parts of the global economy move slowly toward reopening, it is becoming clearer that a full recovery from the worst slump since the 1930s will be impossible until a vaccine or treatment is found for the coronavirus.
Consumers will stay on edge, and companies will be held back as temperature checks and distancing rules remain in workplaces, restaurants, schools, airports, sports stadiums and more.
China – the first major economy consumed by the virus and the first to re-emerge – has been able to revive production but not demand. The lesson for other economies: there will be a stop-start path back toward normal.
There is also the risk of more flare-ups of the virus. About 108 million people in northeast China have been put back under varying degrees of lockdown as a new cluster of infections was reported. Doctors said the coronavirus has manifest differently, suggesting that it may be changing.
In South Korea – where the virus was controlled without a hard lockdown – consumer spending remains weak as infections continue emerge.
Sweden’s highly contested response left much of the economy open, yet the country is still headed for its worst recession since the Second World War.
That means policy makers – who have announced trillions of dollars of fiscal and monetary support – will need to keep the stimulus flowing to avoid more company failures and job losses. US Federal Reserve chairman Jerome Powell said that a full recovery will need to wait until the