A nationwide lockdown enforced to combat the COVID-19 pandemic will impact the British economy in many ways, largely depending on how long the lockdown since March 23 will last and whom are directly affected, an expert has said.
“The extent the country’s economy was impacted largely depends on how long the lockdown lasts and who exactly the lockdown affects directly,” said Geraint Johnes, professor of economics at Lancaster University Management School, adding that the current quarter of the British fiscal year is projected to shrink at “unprecedented” levels by 30 to 35 percent.
According to him, under the current lockdown measures around 65 percent of the British working population is continuing to work, including health care, food production, utility and transport workers as well as people who can work from home.
“Manufacturing is one of the sectors that is badly hit by this,” he said, due to the disruption of the supply chain or the isolation policy.
“A third of all the output in UK is basically cut to zero, so for the second quarter, we’re looking at a very substantial fall in GDP (gross domestic product),” Johnes said.
Other economists have suggested that Britain could have to wait until 2021 for the economy to reach its current size once again. Budget forecasters have suggested that the scale of borrowing needed to pull the country out of a coronavirus-caused economic crisis could match or exceed the post-war debt level of over 200 percent of GDP.
“Different industries will recover at different rates — manufacturing will pick up quite rapidly depending on how the supply chains of individual manufacturers are affected,” Johnes said, adding that it will affect foreign trade as well — the patterns of goods coming into this country in order to be processed.
The professor of economics said he believed that a lot of pressure are on supply chains and companies’ ability to recover from the interruptions caused by the coronavirus outbreak and lockdown.
“Obviously the shorter the lockdown period, the easier it is to pick back up. But if you have a lockdown that lasts three months, up to six months perhaps, then it becomes a lot harder to pick up those supply chains,” he noted.
Source: Xinhua