First effective virus treatment
Major medical step as global economic shock deepens
Scientists yesterday announced the first effective treatment against the coronavirus — an experimental drug that can speed the recovery of Covid-19 patients — in a major medical advance that came as the economic gloom caused by the scourge deepened in the US and Europe.
The US Government said it is working to make the antiviral medication remdesivir available to patients as quickly as possible.
“What it has proven is that a drug can block this virus,” said Dr Anthony Fauci, the Government’s top infectious-disease expert. “This will be the standard of care.”
Stocks surged around the world on the news, with the Dow Jones Industrial Average gaining more than 530 points on the day, or over 2 per cent.
Still, word of the new drug came as the US Government reported that American economic output is shrivelling in the biggest and fastest collapse since the Depression. The virus has killed more than 220,000 people worldwide, including more than 60,000 confirmed deaths in the US, and led to lockdowns and other restrictions that have closed businesses around the globe.
The US said its gross domestic product, or output of goods and services, shrank at an annual rate of 4.8 per cent in the January-March period, the sharpest quarterly drop since the global financial meltdown of more than a decade ago.
And the worst is yet to come: the Congressional Budget Office has estimated that the GDP of the world’s biggest economy will plunge at a 40 per cent annual rate during the threemonth period that ends in June.
The US unemployment rate for April will be released at the end of next week, and economists have said it could range as high as 20 per cent — a level last seen during the Depression.
Amid the economic carnage, President Donald Trump was pushing to reopen the country, allowing federal social distancing guidelines to expire today and even saying he plans to travel to Arizona next week.
Trump laid out plans for returning to pre-virus normalcy despite doctors’ warnings that the country will need to embrace extended social distancing and mask-wearing.
Confirmed infections globally reached about 3.2 million, including 1 million in the US, according to a tally by Johns Hopkins University. The true numbers of deaths and infections are believed to be much higher because of limited testing, differences in counting the dead and concealment by some governments.
California-based biotech company Gilead Sciences and the US Government reported that in a major study, remdesivir shortened the time it takes for Covid-19 patients to recover by four days on average — from 15 days to 11. Also, a trend towards fewer deaths was seen among those on the drug, Fauci said.
The study was run by the US National Institutes of Health and involved 1063 hospitalised coronavirus patients around the world. An effective treatment could have a profound effect on the outbreak, since a vaccine is probably a year or more away.
Economic damage, meanwhile, is piling up around the world.
The United Nations’ main labour body predicted the world will lose the equivalent of about 305 million fulltime jobs in the second quarter.
It also projected that 1.6 billion workers in the “informal economy”, including those working beyond the reach of a government, “stand in immediate danger of having their livelihoods destroyed”. That is nearly half the global workforce of 3.3 billion people.
In Europe, almost every measure of the economy is in free fall. Figures due to be released today are expected to show a drop of about 4 per cent in the first three months of the year in the eurozone, and an even steeper hit is projected this quarter. Unemployment is expected to rise to about 8 per cent.
The figure would be worse if not for massive amounts of government aid to keep millions of workers on payrolls. Government debt is exploding to cover the costs of such relief.
Italy’s credit rating was lowered in the first downgrade of a major economy as a result of the crisis. Its rating stands just one level above junk bond status. Italy expects its economy to shrink 8 per cent this year.
Germany’s economy minister said the government is projecting a contraction of about 11 per cent in GDP by the end of the quarter. But he also predicted a sharp recovery in 2021.
Many economists are sceptical the US economy will bounce back quickly later in the year, noting that the virus could flare up again or consumers and employees might be too worried to return to business as usual.
“The virus has done a lot of damage to the economy, and there is just so much uncertainty now,” said Mark Zandi, chief economist at Moody’s Analytics.