Amit Balooni
Internal

Is there a relation between COVID lockdown Stringency and GDP growth?

Its intuitive to believe that more stringent measure will relate negatively with GDP growth. However, the data from some prominent economies isn’t necessarily that black and white.

Some observations from the graph

  1.  China is just the opposite with high stringency but with relatively high GDP growth. This possibly gives some insight into why China continues to adopt high stringency even now. Mexico is similarly high on stringency while managing a lower -ve  impact on GDP. Oh the other hand Turkey with lower stringency still managed some growth
  2. Japan and South Korea were lenient but face high negative GDP impact. On the other hand Italy was more stringent but also faced high -ve impact on GDP.

In short, its a mixed bag and seem to corroborate the relevance of local or country specific factors that accentuate or attenuate the impact of lockdowns

There are other two possible variables (and explanations) that may have been the key determinants :

a. overall domestic consumption (to determine the speed of rebound)

b. sectoral contribution (some sectors were more impacted and for longer than others)

But that’s for another post 🙂

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