If, as expected, the shutdown is extended to more countries every week, the negative effects on the economy will be longer and exponential, and the mirage of a third-quarter recovery even more difficult...
"While we are not assuming an Italy-style national shutdown in the US, the experience of countries like Italy, Spain and France offers some indications of the impact that extreme local-level quarantines could have."
The current environment has some elements of both prior episodes raising the possibility that the decline in economic activity in upcoming quarters could rival the large declines that occurred in 1980 and 2008.
Until last weekend, global restaurants had snuck between the cracks in the global coronavirus panic. That all ended last Sunday when restaurant traffic fell off a cliff.
Lagarde mentioned the need for EU member states to implement a decisive fiscal stimulus to help SMEs handling the negative economic consequences of COVID-19 and quarantines.
Predictably it was Asia that was hit the hardest, tumbling from a modest, -2% drop in January to a whopping -17% in February, the biggest decline in four years.
