The pandemic through the OECD numbers

I find statistics fascinating, and how these numbers interact with our daily lives. The Organisation for Economic Cooperation and Development (OECD) released some new figures recently, showing that growth of gross domestic product (GDP) in the G20 area slowed to 2.1% in the fourth quarter of 2020, down from the large rebound in the previous quarter (7.8%) that followed the unprecedented falls in the first half of the year due to Covid-19 containment measures.

As you look at the data, you see where the pandemic hit first, with most big economies humming along – maybe not spectacular growth, but nothing too negative. Then in the second quarter of 2020 it all went pear shaped, particularly for the UK and India, with drops of 19% and 25.9%, respectively.

China’s previous respectable growth took a negative 9.7% dive for the first quarter, then rebounded as its plants fired up to make PPE and other useful items for virus containment, along with all the items that we decided we needed while in our houses (an inflatable T-Rex costume, for example. It is a big hit in the neighbourhood when we take our child out for a stroll wearing it.) China’s control of the coronavirus also contributed to its remaining in the positive column for the rest of the year.

Among the G20 economies, India continued to record the highest growth (7.9%) in the fourth quarter, following a growth of 23.7% in the previous quarter. This just about made up for its decline in the second quarter of 2020. India’s drop in the second quarter reflect when the virus landed, but the third quarter rebound shows how its manufacturing has contributed to the supply of needles and vaccine.

In most other economies, GDP growth, although lower than in the third quarter, remained positive: Mexico (3.3%), Brazil (3.2%), Australia (3.1%), Indonesia (2.9%), Japan and Saudi Arabia (2.8% in both countries), China (2.6%), Canada (2.3%), Turkey (1.7%), South Africa (1.5%), Korea (1.2%), United Kingdom and United States (1% in both countries) and Germany (0.3%).

On the other hand, GDP contracted in Italy and France (by minus 1.9% and minus 1.4%, respectively), after strong rebounds in the previous quarter (15.9% and 18.5%, each). What we’re seeing here is the effects of the coronavirus and resulting lockdowns. These countries continue to concern me, as much of the EU does.

On a selfish note, if Europeans don’t get their vaccination properly underway and the virus continues to go through the Continent and mutate (eastern European rates are up), we here in the UK will sit in our self-catering cottages on the south coast and eat chips moodily while yearning to be across the sea in 2021.

The US is worrying with its reopening of the states before cases have properly dropped or its inhabitants been vaccinated. However, the change in administration has meant that the vaccination programme has accelerated. This should hopefully start making a dent in those terrible new cases and death numbers. Again, we’d like to visit family in the US, but right now that looks like a 2022 dream.

For 2020 as a whole, GDP fell by 3.3% in the G20 area, with only China and Turkey recording growth (of 2.3% and 1.8%, respectively), while the United Kingdom experienced the largest fall, at negative 9.9%. This last one seems to be both the Brexit effect, and then you add in the coronavirus. That being said, the last two quarters of 2020 were positive for the UK and we’ll probably see some growth, as the economy reopens and people get their vaccinations.

The OECD offers the caveat that the restrictions of the pandemic made some data collection difficult. The organisation has a lot in common with us all. Stay safe and get vaccinated, and I for one look forward to seeing people in person again.

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