IMF warns against reopening Asia, EU economies too quickly, says countries could risk virus relapse
The economists added that European countries appear to be reopening its economy earlier in the epidemic cycle than China.
Senior economists at the International Monetary Fund on Tuesday warned that moving too early to reopen economies and rollback restrictions and lockdowns in Asia and Europe could lead to renewed coronavirus outbreaks. In a blog, the IMF heads of Europe and Asia, Poul Thomsen and Chang Yong Rhee wrote that if countries moved too quickly, it could hamper the gains made in halting the spread of Covid-19 so far, and trigger new human and economic costs.
The coronavirus has infected more than two lakh people in South and East Asia, and around 9,700 have died. China, India, Indonesia, Japan, Singapore and South Korea account for more than 85% of all infections, the IMF said. Europe is one of the worst-hit countries with 1.8 million confirmed cases and over 1.6 lakh deaths.
The international organisation said that the lockdowns and other restrictions imposed have had a significant economic and psychological impact on citizens, and it was understandable that countries wanted to move swiftly to roll back these measures and reopen economies. But it said that economies in Asia and Europe should proceed carefully and resist the urge to do too much too soon.
A few Asian countries, including China, have been reopening their economies gradually. However, these countries have been carrying out widespread testing, including random screenings in select Chinese provinces alongside, they said. They added that China could also face a debilitating second wave of infections as activity normalises.
On Tuesday, the administration of Wuhan city in China’s Hubei province, where the novel coronavirus was first reported, decided to test all its 1.1 crore residents, due to a fresh cluster of community cases. Wuhan once had the majority of China’s 84,000-plus cases, and had been on a complete lockdown from January 23. The lockdown was lifted only on April 8 after the number of cases began to decline sharply. However, six new cases of the coronavirus were detected in Wuhan over the weekend from a single residential compound.
The economists said that several European countries have also announced plans to gradually reopen, though the countries are following different sequences and pacing. According to Reuters, Spain and France have taken major steps to ease lockdown measures. Germany is also gradually reopening shops and factories, and is being seen as the most successful European country in halting the spread of the virus, owing to its widespread testing.
The economists added that European countries appear to be reopening its economy earlier in the epidemic cycle than China. They said that this puts the countries at a greater risk, given the capacity for large-scale testing, contact tracing, and case isolation there might lag behind the best examples in Asia, “partly reflecting stringent privacy rules”.
“Consequently, Europe appears to be more at risk than some Asian countries, including China, though no country can confidently declare victory against the virus,” the IMF senior economists wrote.
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