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- Coronavirus: The more lockdowns there are, the weaker the economic rebound will be - Natixis
Coronavirus: The more lockdowns there are, the weaker the economic rebound will be - Natixis
FXStreet notes that after the first lockdown in the second quarter of 2020, the economy rebounded strongly in the third quarter. But analysts at Natixis believe that the economic rebound in the first quarter of 2021 after the lockdown in the fourth quarter of 2020 will be weaker, and that if there is another lockdown in the second quarter of 2021 then the rebound in the third quarter of 2021 will be weaker still.
“In the third quarter of 2020, after the first lockdown, very few people expected there would be a second lockdown. First, this explains why the public health restrictions were almost completely lifted in the third quarter of 2020, which led to the second wave. It also explains the strong rebound in consumption. After the second or possibly third lockdown, there will no longer be this expectation of a return to normal.”
“Each lockdown leads to a further deterioration in corporate balance sheets, due to the fall in sales and the increase in debt, which then increases the proportion of zombie firms which struggle to invest.”
“The best strategy in the first half of 2021 will be to try to avert a third wave of COVID by keeping in place the necessary public health measures and by responding rapidly to any sign of uptick in the pandemic.”
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