Economies savaged as virus spikes anew

● Devastating economic figures poured in on Friday as nations counted the cost of their efforts to contain the coronavirus pandemic, even as fresh spikes led many countries to put the brakes on a return to normality.

Six months after the World Health Organisation declared a global emergency, the coronavirus has infected more than 17-million people, with global cases now approaching the 300,000-a-day mark.

The impact is felt in every sphere of life, with elections postponed in Hong Kong — the latest blow to its democracy activists — and the Muslim hajj pilgrimage in Saudi Arabia performed with radically reduced numbers.

In a sign of the terrible trade-offs being forced on governments, Britain imposed new lockdowns in several northern counties on Friday, just as Western Europe announced historic economic slumps that would have been unthinkable at the start of the year.

France’s economy contracted by 13.8% in the April-June quarter, mirroring similar devastation in Spain (18.5%), Portugal (14.1%) and Italy (12.4%). Europe as a whole saw GDP fall by 12.1% in the eurozone and 11.9% across the EU bloc.

“It is a shocking drop, but completely understandable as the economy was shut for a considerable period,” said Bert Colijn, senior economist at ING Bank.

One sector that is not struggling is pharmaceuticals, as the world pins its hopes on the race for a vaccine.

Pharma giants Sanofi and GSK announced they will receive up to $2.1bn (R35.6bn) from the US government for the development of a Covid-19 vaccine.

And the US-German pharma team-up of Pfizer and BioNTech signed a deal with Japan to provide 120-million doses of their potential vaccine. They kept the size of the deal under wraps, but the US government recently put the cost of 100-million doses from those firms at almost $2bn.

But many businesses are in free fall, with airline conglomerate IAG, the owner of British Airways, posting a first-half net loss of $4.5bn and UK bank NatWest sliding into the red, while Dutch airline KLM and truck makers Scania said they were each shedding 5,000 jobs.

It comes a day after the US — the world’s hardest-hit nation and its biggest economy — posted a second-quarter fall of 9.5% compared with the same period a year ago, the worst it had ever recorded.

Strict European lockdowns were effective in bringing cases and deaths under control, but an uptick in cases means the restrictions are far from over, even if they have become more localised and specific.