October 27, 2020

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IMF: Unlocking too early hurts the economy more NOW

IMF: Unlocking too early hurts the economy more NOW

Lifting locks related to COVID-19 too soon to save the economy could backfire. If the virus spreads too quickly, people will take this into account in their behavior, which is actually damaging the economy, the International Monetary Fund said in an analysis on Thursday.

The IMF writes in the World Economic Outlook about a false contradiction between economic interests and the desire to save lives. Bans cause economic damage in the short term, but cause the virus to disappear in the medium term.

According to the report, the effect of voluntary distancing is (voluntary social distancing) underestimated. According to the IMF, data from Google and job boards show that mobility and employment will continue to suffer even after the ban is lifted.

However, the IMF notes that lockdowns have a disproportionately large negative impact on vulnerable groups such as women and young people. However, if action is taken immediately once the virus sets in, the measures won’t last long and the damage will be limited, the report said.