Covid-19 Watch: Lockdowns and Economics

Prepared by Professor Alan Whiteside, OBE, Chair of Global Health Policy, BSIA, Waterloo, Canada & Professor Emeritus, University of KwaZulu-Natal – www.alan-whiteside.com1 and Dr Steven Forsythe, Deputy Director of Economics and Costing, Avenir Health


After I began posting I promised to invite guest contributions. It is with great pleasure (and some relief) that this post focuses on the economics of Covid-19, written by friend and colleague Dr Steven Forsythe. Please, readers, feel free to suggest what you want covered in greater depth. The world is stirring as countries tentatively start the process of emerging from lockdown. This is a key topic for next week.2 I am adding three key, usually short, readings per week at the end of the blog.

The Numbers

As of 10 am 29th April 2020 the JHU Coronavirus Resource Centre recorded 3,117,756 global infections3.

Table 1: Global and National Cumulative Numbers of Confirmed Covid-19 cases (alphabetical order)4
Date Global cases China France Italy South Korea South Africa Spain UK USA
15 Feb 69,000 68,400 12 3 28 0 2 9 43
4 Mar 93,000 80,480 288 3,100 5,600 0 222 86 149
11 Mar 120,000 80,900 2,300 12,500 7,800 13 2,300 459 1,300
18 Mar 201,500 81,100 9,100 35,700 8,400 116 13,900 2,600 7,800
25 Mar 423,000 81,700 25,600 74,400 9,100 709 49,500 9,600 65,800
1 Apr 861,000 82,400 57,000 110,600 9,900 1,400 104,100 29,900 213,400
8 Apr 1,431,357 82,783 110,070 135,586 10,384 1,749 141,942 55,949 339,886
15 Apr 1,982,552 83,351 131,682 162,488 10,591 2,415 174,060 94,845 609,422
22 Apr 2,565,258 83,864 159,300 183,957 10,694 3,465 204,178 130,184 835,306
29 Apr 3,117,756 83,940 169,053 201,505 10,761 4,996 232,128 162,350 1,012,583

The US continues to have both the largest number of deaths (58,355) and the largest number of infections (1,012,583). Trump claims the number of infections is due to the fact the country (finally) is testing and looking for cases. He has a point about the data. Rates give a better comparison. For example deaths per 1 million population: most heavily affected countries are Belgium (631), Spain (503), Italy (441), France (341), United Kingdom (312), Netherlands (262), Ireland (224), Sweden (223), Switzerland (193), Montserrat (186), the United States (171), and Luxembourg (145). Those with most Covid-19 cases per million are Luxembourg (6,136), Spain (4,910), Belgium (4,087), Qatar (4,042), Ireland (3,969), Switzerland (3,424), Italy (3,271) and the United States (3,029). The countries performing the largest number of Covid-19 tests are the United States (5.6 million), Russia (3.0 million) and Germany (2.1 million).5 (Data from 27th April).

Health data and information is also on The Institute for Health Metrics and Evaluation (IHME) website at the University of Washington,6 with its Covid-19 resource centre.7 Remember:

‘A confirmed case is “a person with laboratory confirmation of COVID-19 infection” as World Health Organization (WHO) explains. But specifics can differ and the European CDC, on which we rely, reports confirmed cases according to the applied case definition in the countries.’8

We are still waiting for an antibody test.

Data and its implications


China’s data indicate virtually no new Covid-19 cases. A critical independent analysis of the Chinese data is necessary. However, a blame game is unhelpful. Initially South Korea was the second worst affected country. It has just under 11,000 cases, with small increases. It has the epidemic under control, as do Taiwan and Japan.

India’s case load has risen to 31,332, up from 11,555 cases it had on 22nd April. The epidemic in Singapore illustrates how fragile success can be. The government believed it was managing the outbreak, but numbers have risen dramatically, with outbreaks in the migrant populations. It currently has 14,951, an increase of several thousand in the last few days.9 New Zealand is on the point of declaring the epidemic over but recognises it will have to continue monitoring.10


The situation in Europe remains dire, but most countries are turning the corner with fewer new cases (Table 1). There are outliers here, Greece has just 2,566 cases and is keeping numbers down. The UK will be worst affected due to shockingly poor, slow leadership. On 22nd April it had 161,145 cases and 21,678 deaths in hospital alone. Daily cases are slowly being reduced and the population has been mostly compliant,11 but endurance is wearing thin. Further analysis should ask why some EU countries such as Greece, Austria, Portugal have seen small epidemics.


The low numbers continue. Egypt now leads with 5,042 cases, followed by South Africa with 4,996. There are growing numbers in coastal west Africa. Most other countries report a slow growth. South Africa has flattened its curve12 with a tight national lockdown. The South African Ministerial Advisory Group heard an excellent strategic presentation from chair Professor Salim S. Abdool Karim on 13th April 2020, (see the footnote).13

The Americas

Numbers are growing rapidly in South and Central America. Brazil leads with 73,235 cases, followed by Peru at 31,190, and Ecuador at 24,258. All other countries are below this but seeing a steady increase. Chile kept its week-on-week increase down, it was at 10,832 on 22nd April and 14,365 on 29th April. Canada had 51,150 cases on 29th April (39,405 on 22nd April, 27 and 8,591 on 1st April). It is hard to make sense of national data – provincial level analysis may be more appropriate. Care homes are severely hit. The US numbers remain astonishing, first in global rankings. There is merit in looking at the data by state.

The Economics of the Pandemic by Dr Steven Forsythe

From an economic perspective, it is useful to divide impact into macroeconomic, sectoral and community/family. The International Monetary Fund estimates that global GDP will drop by 3% in 2020, which is an update of pre-COVID estimates projecting global GDP would increase by 3%.14 The US is projected to have a 5.9% decline in GDP, with the Euro area declining by 7.5%. China’s GDP is expected to increase in 2020 by just 1.2% (down from the 6% growth rate projected in January). The IMF projects that the least affected regions will be Sub-Saharan Africa (1.6% decline), ASEAN-5 countries (0.6% decline) and the emerging/developing countries of Asia (1.0% increase).15

Chart showing new economic forecasts for 2020

Source: IMF World Economic Output (April 2020), from CNBC

The impact of COVID-19 has been particularly devastating to the travel industry. Some of the countries most reliant on travel and tourism as a percentage of GDP include Macau (72.2%), Seychelles (67.1%), Maldives (66.4%) and St. Kitts and Nevis (62.4%). On the African continent countries like Egypt (11.9% of GDP), Tanzania (11.7% of GDP) and Kenya (8.8% of GDP) fall into this category. In the OECD countries the sight of a deserted Piazza San Marco in Venice, London without any traffic, and the empty Mall in Washington DC, show this is not just a developing world catastrophe. This is, of course, without considering the impact on the airlines and airports that are integral to the movement of tourists. The cruise industry, if not dead, will need life support.

The impact of economic sectors has, in turn, led to declines in the stock market. As of this writing, Carnival Cruise Lines declined by 76% in 2020, Boeing stock price by 60% and Exxon by 37%. However, not all companies have done poorly, especially those companies that were able to easily pivot during the lockdown. Netflix stock increased by 31% in 2020, based on increased numbers of people wanting to be entertained at home. Companies that focus on working from home have also done well, including Zoom (up 133%) and Norton/Lifelock (up 40%). Retailers that deliver to homes have similarly seen growth, with Amazon gaining 30% in the year to date. Companies focused on COVID-19 treatments have also done well, including Gilead (up 23% in 2020) and Regeneron (up 51% in 2020).

While overall businesses and the stock market has suffered (in the US, the S&P 500 has declined by almost 11% this year, while Brazil’s BOVESPA declined by 35%, the Italian MIB by 26%, the British FTSE by 22% and the Chinese Shanghai index lost 8%), the degree to which this impact has occurred has been highly uneven.

Ultimately the full economic impact of COVID-19 will probably not be well reflected in either macroeconomic projections or in stock prices, but rather in the impact that this pandemic has on the lives of people, their families and their communities. Most countries have closed schools and universities. However, this has its own consequences. As students spend longer periods of time away from their schools, the impact on educational attainment will grow. Furthermore, the inequity in education will widen, with students who have access to a laptop and the internet doing better than those who do not.

In a recent commentary it was noted that another unintended consequence of the great lockdown is intimate partner violence. The authors note “Many of the strategies employed in abusive relations overlap with the social measures imposed during quarantine.”16 In addition, the impact of COVID-19 and the associated lockdown may lead to hunger. The head of the UN Food and Agriculture Organization indicated that an additional 130 million people could be on the brink of starvation by the end of 2020.17 The combination of macroeconomic impact, sectoral impact and community/family impact will have devastating consequences, particularly for those already living in poverty.

In “normal” epidemics public health experts focus on the “Three Ts” (Trace, Test and Treat). This is not yet entirely the case with COVID-19 since treatment consists of supporting seriously ill patients with mechanical means such as ventilators. Economists are focusing on the “Three Rs” (Respond, Restart and Reform). We look at ways in which decisions have been made in each of these Rs.


The macroeconomic responses to COVID-19 have generally been similar, including shutting down the economy, increasing fiscal stimulus programs (including loan guarantees) and loosening the money supply. The “great lockdown” has involved requiring or recommending people work from home and travel only for essential services. Increasing fiscal stimulus involves assuring that unemployment insurance can be maintained, in some cases providing stimulus checks and guaranteeing loans to businesses that agree to maintain employment of their workforce. Meanwhile monetary policy focuses on getting more money into the system, lowering interest rates and encouraging spending and growth. In the US, the fiscal response included $8.3 billion for Phase 1, followed by $104 billion for Phase 2, $2.3 trillion for Phase 3 and $484 billion for Phase 3.5. The US is now considering a Phase 4 stimulus which is expected to be much larger than Phase 3.5. To put this into context, the entire US government received revenues of $3.5 trillion in 2019, which suggests that the amount of money spent on stimulus and recovery in 2020 will be larger than the federal revenues of the previous year. Meanwhile monetary policy has injected approximately $4.5 trillion into the US economy.

The stimulus and recovery packages relative to GDP have been particularly high for some countries, including Japan (21.1%), United States (14.1%), Singapore (13%), Macao (12.1%), Hong Kong (10%), Iran (10%), Australia (9.9%), and Austria (9.0%). Most African countries set aside less than 1% of GDP for the response, with the exceptions of South Africa (10%), Namibia (4.25%), Central African Republic (1.9%), Egypt (1.8%) and Botswana (1.1%). Some African countries committed to larger budgets, but these are dependent on international donor funding (e.g., Togo, 11.8%, Niger, 7.4%, Senegal, 7.0%).18

In the US, the stay-at-home orders were driven by decisions of the governors of individual states. As a result, there was no single date when the order was put in place. The orders to stay at home varied from March 20th to April 6th, 2020, with 8 states never giving a stay at home order19 (those states only account for 2% of all infections in the US).

South Africa had perhaps the most stringent lockdown in the world. This included restrictions on domestic and international travel, and prohibiting the purchase of non-essential goods, including cigarettes and alcohol. While South Africa has been hailed as a success story, the jury is still out.20, 21 On April 23, South Africa had its largest number of new COVID-19 infections since the start of the epidemic (318), this fell to 247 on the 27th April.

Few countries have avoided “The Great Lockdown”, with Sweden being a notable exception.22 Sweden did not formally adopt a lockdown, although it has strongly recommended that those most vulnerable remain indoors. Sweden has essentially relied on herd immunity, with as many as half of Stockholm’s population being infected. As a result, Sweden has 17.3 COVID-19 deaths for every 100,000 people. Denmark, on the other hand, did have a lockdown and had only 6.4 deaths for every 100,000 people, while Norway had 3.4 and Finland had 2.6. Will Sweden benefit from herd immunity, or will its policy be determined to have been foolish? The jury is still out, but many countries are evaluating Sweden’s response to see if it has important lessons for other countries.


The question is that of restarting the respective economies. When does the economic risk outweigh the epidemiologic risk? Economists agree that economies must be restarted, but the real question is “when”? In the early stages of the pandemic, it was clear that the lockdown had significant economic benefits. In the US, the government uses the figure $10 million to calculate the value of a human life. At the time, the U.S. was looking to potentially save 2 million lives (excluding the benefits of disability prevented). Therefore, the benefits of the lockdown, assuming that all these lives would have been saved, was $20 trillion. The GDP in the country is $21.4 trillion and thus the country could have forfeited an entire year of GDP in order to save those 2 million lives. However, with the increased effectiveness of the lockdown, the incidence of COVID-19 will decline and the incremental lives that will be saved by a continued lock-down are likely to be less. Thus, at some point, a political decision will have to be made to restart the economy even though it may result in lives lost.

In Africa, Botswana was the first country to restart its economy. Much of Africa is currently ending their lockdowns, even though data indicate that in the last week there has been a 43% jump in COVID-19 cases.23 President Magufuli of Tanzania has called for the world to forgive Africa’s debt, but has not shut down the country’s economic capital, Dar es Salaam.24 In Burkina Faso, the main market has been reopened and South Africa has begun a slow process of restarting their economy.

One innovative technology proposed is that of immunity cards. Chile has indicated that they would use testing and immunity cards, which would allow those who are previously infected to return to work and travel more freely. The idea of such a card is also being evaluated in the UK, France and the United States, assuming such a card would allow for a gradual and a safe restart to the economy. However, the WHO warned immunity does not act as a guarantee against being reinfected, and immunity cards might contribute to the spread of the virus rather than act as a deterrent to infection.25

Factors that could make a restart more effective would include the availability of either a treatment for COVID-19 or a vaccine. Bill Gates projected that a vaccine could take anywhere between 9 months and two years, with his best guess being 18 months.26 Others, however, have been much more pessimistic, noting that vaccines typically take 5 years to develop. They also recall the prediction from 1984 when Reagan’s Secretary of Health and Human Services, Margaret Heckler, predicted that an AIDS vaccine would be available in two years, the world is still waiting for this.

With regard to treatment a number of new and repurposed drugs are going through clinical trials, including lopinavir/ritonavir, hydroxychloroquine and Remdesivir. Lopinavir/ritonavir is used as an HIV drug, with hope that it would also become an effective treatment against COVID-19. The first study showed that this drug was not effective.27 Hydroxychloroquine has produced some positive results,28 but there are significant doubts about both side effects and treatment efficacy.29

Remdesivir has seen a great deal of uncertainty, although WHO and Gates both identified this drug as potentially being the most likely to be effective. This drug was developed as a treatment for Hepatitis C in 2009 but failed. It was tried as a treatment for Ebola, but again was not successful.30 Subsequently it was discovered to be effective against coronaviruses including SARS and MERS and therefore was assumed to be potentially effective against COVID-19. An article in the New England Journal of Medicine reported that remdesivir had positive results based on preliminary results from patients receiving the medicine as part of a compassionate use program.31 The journal STAT subsequently reported preliminary results from the University of Chicago where a clinical trial was indicating potentially significant positive results.32 However, the optimism turned to pessimism when results from China, and leaked by the WHO, showed no impact.33 More results may be released soon to show definitively if Remdesivir is effective in treating COVID-19.

With tremendous uncertainty about the effectiveness of any treatment, there are also significant questions about the price of any such treatment. Analysts have reported that Remdesivir might be sold for a price anywhere between $50 to as high as $5,000 per treatment. These figures raise the question of whether any treatment will be affordable in developing countries, repeating the devastating history of highly active antiretroviral therapy, (ART) which became available in 1996, but was so expensive that few HIV-infected individuals in Africa were able to afford it. As a result, millions in Africa died due to the unaffordability of treatment.34 ART prices feel from 2000.


While some have suggested that any long-term reforms must focus on increasing taxes, others are less certain. Providing further funding to governments which oftentimes fumbled the response to COVID-19 seems like a particularly tough argument. Despite attempts by the US administration to cut the CDC budget, funding increased from $7.2 billion in 2016 to $7.7 billion in 2020. Nonetheless, the response from the CDC to COVID-19 was inadequate. Regardless of tax policies pursued, there will still need to be a way to address the substantial deficits that are being left for the next generation to pay. There is likely to be large-scale support for policies that remove loopholes which allow companies to avoid taxes, particularly in countries like the US where businesses have already benefited from reductions in corporate taxes.

Countries themselves will also need to address concerns about potentially inflationary fiscal and monetary policies. On the one hand, economists point out that the 2008 fiscal crisis and the subsequent bailout using large fiscal and monetary interventions did not result in wide-scale inflation. They warn that traditionally pandemics result in deflation.35 However, the Wall Street Journal recently noted that the spending currently being implemented in the US is likely to lead to substantial inflationary pressures.36 If inflationary pressure does occur, this will mean countries will have to reduce spending and their money supply, which could have harsh consequences on recovering economies. At some point, the spending will need to stop.

One potential global reform would be the creation of something like the Global Fund for AIDS, TB and Malaria, but focused on emerging epidemics. This could build on the World Bank based Pandemic-Emergency Financing Facility37. Having one body could address issues like:

  • Funding the purchase of medical equipment and supplies (e.g., ventilators and respirators) and assuring their purchase, stockpiling and distribution on a global scale for both developed and developing countries,
  • Promoting the development of affordable vaccines and therapeutics with appropriate economic incentives to encourage development of these products.
  • Collaborating with the IMF and the World Bank to develop a global fiscal response with support for countries that are most affected by emerging epidemics.
  • Review the accuracy of models that have predicted the spread of COVID-19 and design new models that can address other new pandemics.

Reforms need to consider the high cost already incurred and which may be incurred with future pandemics. The world was not adequately prepared for COVID-19 but can be prepared for the next pandemic. It comes at cost, as we will also have to pay the large sums spent dealing with Covid-19.

Just three key readings:

Ellie Graeden, Colin Carlson, Rebecca Katz, “Answering the right questions for policymakers on COVID-19, Lancet Global Health, April 20, 2020, – for everyone involved in policy. – an important article by Professor Max Price.

A UN framework for the immediate socio-economic response to COVID-19 APRIL 2020 – the UN continues to not use one word when five will do, this is still worth knowing about.

Thank you to everyone reading, reposting and providing comments. For those who are particularly interested in the economics of COVID-19, please feel free to join the group through the “Economics of COVID-19” LinkedIn group. Everything I write is public domain. Please share, forward and disseminate. My contact:

  1. Red text indicates figures or information will change. Bold text indicates a key point.
  2. Francois Venter, Kathy Mngadi, Nkuli Mashabane, Di Cooper, Nathan Geffen and Samanta Lalla-Edward, Covid-19: Sixteen practical suggestions for easing the lockdown, Groundup, 21 April 2020
  4. These data are from the JHUM website. The countries are chosen because of their epidemics.
  14. Eric Martin, “IMF Sees Great Lockdown Recession as Worst Since Depression,” April 14, 2020,
  15. International Monetary Fund. World Economic Outlook. April 2020.
  16. Van Gelder N., et al. (2020) “COVID-19: Reducing the risk of infection might increase the risk of intimate partner violence.” EClinical Medicine,
  17. Givetash L. “U.N. Warns of ‘Hunger Pandemic’ Amid Threats of Coronavirus, Economic Downturn,” April 22, 2020, NBCNews,
  18. International Monetary Fund, “Policy Responses to COVID-19”,
  19. North Dakota, Wyoming, South Dakota, Iowa, Utah, Nebraska, Arkansas and Oklahoma.
  20. Charley Shey Wiysonge, “South Africa’s War on COVID-19: Key dates, interventions, and impacts of responses are helping to create a community of practice among African countries.” April 20, 2020, Think Global Health,
  21. Dan Meyer, “WHO Praises South Africa for ‘Incredible’ COVID-19 Response,” April 23, 2020, The South African,
  22. Franks PW. “How Close is Sweden to Her Immunity from the Coronavirus?” April 27, 2020, RealClearScience,
  23. Gerald Imray, “Africa’s 43% Jump in COVID-19 Cases in One Week Worries Experts,” 23 April, 2020, The Times of Israel,
  24. “Tanzania Wants Debts Cancelled as OIC Urges Support for Africa,” 22 April, 2020, Al Jazeera,
  25. Dwyer C. “’No Evidence’ Yet That Recovered COVID-19 Patients are Immune, WHO Says,” April 25, 2020, NPR,
  26. Bill Gates, “The First Modern Pandemic: The Scientific Advances We Need to Stop COVID-19,” April 23, 2020, GatesNotes,
  27. Cao B, Wang Y, Wen D, et al. “A Trial of lopinavir-ritonavir in adults hospitalized with severe Covid-19.” The New England journal of medicine. 2020:1-13.
  28. Chen Z, Hu J, Zhang Z, et al. “Efficacy of hydroxychloroquine in patients with COVID-19: results of a randomized trial.”
  29. Ferner R, Aronson J. “Hydoxychlorquine for COVID-19: What do the clinical trials tell us?”, 14 April, 2020, Centre for Evidence-Based Medicine,
  30. Stephens, B “The Story of Remdesivir,” April 17, 2020. The New York Times,
  31. Grein J, Ohmagari N, Shin D, et al. Compassionate use of remdesivir for patients with severe Covid-19. The New England journal of medicine. 2020:1-10.
  32. Feurstein A, Herper, M. “Early Peek at Data on Gilead Coronavirus drug Suggests Patients are Responding to Treatment,” April 16, 2020, STAT,
  33. Silverman E, Feurstein A, Herper M. “New Data on Gilead’s Remdesivir, Released by Accident, Show no Benefit for Coronavirus patients. Company Still Sees Reason for Hope.” April 23, 2020, STAT,
  34. Forsythe S, Cohen J, Neumann P, Bertozzi S, Kinghorn A. “The Economics and Public Health Imperatives Around Making Potential COVID-19 Treatments Available and Affordable,” Value in Health, In Press.
  35. Jorda O, Singh SR, Taylor AM. “The longer-run economic consequences of pandemics,” CEPR Policy Portal.
  36. Congdon T. “Get Ready for the Return of Inflation,” April 23, 2020, Wall Street Journal,

4 thoughts on “Covid-19 Watch: Lockdowns and Economics

  1. Once again, Alan, many thanks for this.  Wonderfully informative and analytical as always. I was wondering whether you could have a section on statistics and transparency and its impact.  For example, here in Tanzania, no one believes the statistics, they were stopped for four days after the President wanted us to show more people recovering, no of tests carried out is never mentioned and as a result people are either confident that there is no real problem or fall victim to every rumour going around. Twitter is full of videos showing midnight burials, bodies picked up from the street (2 at the moment) and there does seem to be rather a high number of people dying … we will soon reach the stage where, at least all urban dwellers, will know someone who is suspected to have died from COVID. All the best and many thanks againRichard


  2. Dear Professor Whiteside Thank you very much for your excellent newsletter on the evolving Covid-19 pandemic. I recently watched presentation ‘Perspectives on the Pandemic’ | Update: 4.17.20 | Episode 4′ by Dr. John Ioannidis from Stanford University at the following link. Dr Ionnidis discusses a Covid-19 research study conducted to measure the seroprevalence of antibodies to SARS-CoV-2 in Santa Clara County, California. ( Per the paper (attached as ‘2020.04.14.20062463v1.full.pdf’),  ‘The reported number of confirmed positive cases in the county on April 1 was 956, 50-85-fold lower than the number of infections predicted by this study’ and the conclusions are: ‘The population prevalence of SARS-CoV-2 antibodies in Santa Clara County implies that the infection is much more widespread than indicated by the number of confirmed cases. Population prevalence estimatescan now be used to calibrate epidemic and mortality projections.’ The study received substantial criticism, e.g. per the following link:’The Stanford study was not a true random sample,” said Prabhat Jha, an epidemiologist at the University of Toronto, in an email to Undark. In addition, he said, “their testing was flawed, so they might have many false positives.’ ( Despite the criticism to the Santa Clara study, my opinion is that this type of study, provided it is experimentally and statistically sound, should be of high value for epidemiological decision making. If this is the case, this type of research should be conducted much more widely and with great urgency, also in South Africa. Would you agree? Kind regardsGerhard Kleynhans


    • The one thing that has really impressed me among scientists I follow is their willingness to say ‘we don’t know’ and we don’t, In the UK we have been only reporting hospital cases, but care homes are now included. The ONS data are better


  3. Dear Alan,

    I just want to say that your newsletter is more readable, informative & helpful than pretty much anything else that I read.

    Thank you. I’m sure it must be hard work to make this much sense out of everything, but please keep going.

    Kind regards

    Margie Cunnama 0836611620


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