Global Pandemic Economy Tracker Analysis

Unless specified, the latest data by June 29, 2020. Please check here to see why this tracker can be a useful tool

COVID-19's First Wave

The first wave puts into perspective the fundamental tradeoff of the “Pandemic Economy” that if a country takes decisive and rapid measures to control the epidemic, the economic and health costs can be diminutive.

Figure 1: How far have countries in the first wave progressed? 

Source: PET project, using data from Google, Apple, Amap, Baidu, Wind, ECDC, NHC of China, and the Johns Hopkins University. Note: DPM, the number of deaths per million people.

  • Mainland China went through a path similar to that in the Pandemic Economy Framework. After 29 days of contraction during the Response and Trough phases, the epidemic was effectively controlled when the Doubling Days of Confirmed Cases was around 10 and a rebound of economy from the low point of 80% was immediately observed. By June 29th, the economic activity has recovered to about 97%. In the absence of major shocks, the overall performance of the Chinese economy in the second quarter will be significantly better than that of the first quarter. Taking into consideration the stimulus policies being implemented recently or planned, the year-on-year economic growth in the third and fourth quarters will most likely be positive.
  • South Korea stayed in the Response and the Trough phases for 21 days, highlighting the effectiveness of their preparedness and rapid epidemic responses. The contraction of the economy is relatively low at around 5-6%. At present, they have returned to about 98% of the pre-COVID level, with doubling day above 110.
  • Japan did not take extensive mobility restriction measures in the early period, and stayed longer in the Response and the Trough phases, with a total of 33 days. Its doubling day is still about 70, and the current death rate is 7.7 DPM, higher than that of China (3.3 DPM) and South Korea (5.5 DPM).

The Second Wave

The advanced economies were hit in the second wave of the pandemic. Having paid substantial life and economic costs, most of them have entered the Recovery phase, with a few still remaining in the Trough.

Figure 2: The Pandemic Economy Trough

  • Australia and New Zealand have stayed in the pandemic economy for around 95 days, with short Response and Trough phases of less than 15 days. Their economic activity is back to 96% and 97% respectively, with doubling days above 85 and death rates below 5 DPM, close to the level of East Asian countries.
  • Having stayed in the pandemic economy for 105 days, the US still lagged behind in epidemic control. Its doubling day is still around 50 and its death rate is around 382 DPM. The economic activity has recovered from 86% to about 92%. If the overall economic activity contracted by about 10% in Q2 than normal condition, the annualized economic loss would be -34%, which is close to the US Congressional Budget Bureau's estimate of the Q2 economic growth rate of -38% (annualized).
  • The situation in the UK is similar to that in the US, but it has incurred significantly more severe epidemic and more economic contraction. Its death rate is around 653 DPM, second only to Belgium globally, and its economy has only slowly recovered from the lowest point of 80% to about 90% in recent days. UK’s latest official statistics show that GDP fell by 20.4% in April, consistent with the estimated daily average economic activity level (~80%) in April.

  • Italy is among the hardest hit countries in Europe and has stayed 125 days in the pandemic economy, with a death rate of 569 DPM. The Recovery period began after two months of contraction, and the economic activity is now back to about 94%, up from the bottom of 75%.
  • Both Norway and Sweden stayed in the epidemic economy for about 110 days, but Norway’s more active epidemic control resulted in a much speedier recovery and slightly deeper economic contraction. The former is still on a steady recovery, while the latter is in unsteady decline.  The death rate in Norway (47 DPM) is one magnitude lower than that in Sweden (516 DPM), highlighting the failure of the latter’s herd immunity strategy.

The Third Wave

The third wave has become the epicenter of the pandemic, with confirmed cases from these regions accounting for more than 70% of the global total.

Figure 3. The evolution of the global pandemic economy

The paths of PET in emerging and developing economies in Asia, Africa and Latin America is much more diverse and complex. A few economies in each region, such as Rwanda in Africa, Thailand and Vietnam in Southeast Asia, and Uruguay, in Latin America, have adopted more effective epidemic containment measures. Compared with other countries in the region, they had much fewer deaths and are far ahead in their pandemic economy. For example, the level of economic activity in Vietnam has recovered to that of the pre-COVID period.Rwanda in Africa had earlier successfully contained two rounds of outbreaks, while now facing a much stronger third round, but maintained a low death rate of only 0.2 DPM.

More countries, such as India, Argentina and South Africa, still cannot effectively control the epidemic after more than 3 months of economic contraction, their doubling days are still hovering between 10-20, not good enough for them to advance to a safer zone of the pandemic economy - the right side of the PET graph. Some have paid substantial life costs. For example, Brazil has a death rate of 273 DPM, clearly a result of its fits-and-starts epidemic control strategy.

The Big Pictures: The Economic Stakes

We estimated the percentage of economic losses relative to 2019 GDP for these countries and regions and plotted them with their COVID-19 death rates. The result shows that countries suffering greater loss of life often incurred greater economic losses as well. This indicates that loosening epidemic control to protect economy is probably not a sustainable option. The countries and regions in the lower right corner in Figure 6, currently including many Latin American countries, are in the most difficult situation.

Figure 6. The relationship between epidemic control and estimated economic loss in the second quarter

Source: PET project team, using data from Google, Apple, Amap, Baidu, ECDC, and the Johns Hopkins University.

For those upper-left countries right now in Response or Trough phases, they may move lower right into the unluckiest corner if they cannot bring the epidemic under control in a timely manner.

A Closer Look: Contrasting Pandemic Economy Curves

The Evolution of the Global Pandemic Economy​

From a global perspective, as of June 29th, 62 of the 132 countries and regions tracked by the PET system have entered the recovery phase. Prior to this, they spent an average of 50 days in the response and trough phases combined, and another 61 countries and regions are still in either response or trough phase, where they have stayed on average for 105 days. A long-term stay in contraction mode will undoubtedly bring more damages to their social and economic systems.

Note: Nine economies with few COVID-19 cases (<150) and without clear trends in both epidemic and mobility are temporarily classified in the “Others” category.

We will continue to track and update the global pandemic economy on a daily basis, and will soon add interactive features and elements, as well as ways to download PET data, to facilitate more interested parties and professionals to track and compare PET trajectories worldwide.

Help us improve this project: Please email PETproject@luohanacademy.com with feedback, requests, or tips about additional sources of data. Thank you to the many readers and colleagues who have already helped us with feedback and suggestions. We continue to incorporate your suggestions and data every day. We will respond to as many people as possible.  

Further Reading

For a more detailed explanation of the Global PET Project, please check Michael Spence and Chen Long's Project Syndicate article, Graphing the Pandemic Economy, and the full LHA report Measuring and Tracking the Global Pandemic Economy.

Why PET Can Be a Useful Tool - Understand the trade-offs between the pandemic and the economy as well as tracking them in a precise and timely manner is key for all major decisions, from the community to global levels, to avoid unnecessary costs and find robust recovery strategies.

Five-phase Pandemic Economy Framework - To facilitate a structured way to understand and navigate through the dynamic trade-off between epidemic control and economic activity, Luohan Academy proposes a generic five-phase pandemic economy framework. We have also added an explanation of Interpreting the PET Curve.

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