#GrowthTalksEADA on the economic impact of lifting confinement measures
On 13th May, following two months of lockdown and with de-escalation measures firmly in place, #GrowthTalksEADA (a series of webinars dedicated to understanding the impact of Covid-19 in all areas of activity) hosted a session which focused on analysing the consequences of the pandemic on business and the economy. Returning guest speaker Arturo Bris, Director of the World Competitiveness Center and Professor of Finance at IMD, provided his solutions to find the correct balance between the prevention of damage caused by Covid-19 and the adverse effects resulting from a major contraction of economic activity.
In Arturo Bris’ opinion, the Spanish government must combine their epidemiological and economic strategies during the lifting of confinement measures in the coming weeks: “the optimal strategy for easing lockdown must take into account sociological, ethical, public health and economic aspects. In sociological terms, confinement measures must be lifted. Ethically, we have to protect those who are confined and the optimal policy is somewhere in between these two extremes”.
According to Professor Bris, who ranks among one of the top 100 most-read finance academics in the world, “the best way to protect both the population and the economy is to ease restrictions only in sectors where telework is not possible and where social distancing measures can be put into place”. In his opinion, groups who do not contribute to production such as children under 16, those over 65 or vulnerable adults should stay at home and “priority should be given to the sectors which have a higher added value and employability”.
The speaker explained that, based on the latest economic figures, “Spain cannot extend lockdown for much longer. Four more weeks of confinement could have an impact of 6.8% on GDP”.
To conclude the webinar, the finance expert made the following reflection: “We have to deal with type 1 and 2 errors. The first is to relax lockdown measures for an infected person and the second is to contain a healthy person. Both errors would have an impact on the economy and the health system. The Government must find the correct balance by combining both errors to achieve an optimal strategy, knowing that it will affect both the economy and public health”.