Global Macro Watch – Covid-19 hit to GDP: Some will fare much worse than others

There are significant differences between countries in pandemic severity and lockdown intensity. Alongside variation in digital preparedness and tourism exposure, this is leading to starkly different economic outcomes, with some countries experiencing more severe downturns than others. We find that Italy, France and the UK are seeing the most significant macroeconomic impact, with the Netherlands, Germany and the US faring better. In the US and UK, Q1 GDP fell by less than in other countries because lockdowns were implemented later, but a much bigger impact will be visible in Q2.Those with more severe 2020 downturns are likely to experience more permanent economic damage.