While coronavirus infections continue to rise in Europe, they’ll likely have less of an economic impact this time around, Klaas Knot, Dutch central bank president and European Central Bank board member, said on Tuesday (Oct. 13), Reuters reports.
He said the reason was that things would be less unexpected now that the world had already gone through the initial shock of the pandemic.
“We know a bit more about the virus now, and businesses have learned to adapt where possible, for instance through online retail,” he said, according to Reuters.
However, he added that new restrictions put in place to stem the virus will likely lead to slowdowns anyway, saying the second wave will “dent” the economy — though it’s not yet clear by how much.
Knot said the European Central Bank would look closely at trends in the coming weeks and see if it needs to extend emergency support measures, and that the largest Dutch banks would continue to have access to lower capital demands through the end of the year, which will help keep credit flowing, the news outlet reported.
He added that the new lockdowns spreading across Europe would make it necessary for governments to support businesses and workers at risk because of the economic pressures.
“The costs of ending measures too soon are higher than the costs of maintaining them longer than necessary,” he said, according to Reuters. “And we must avoid ending them all at once. When the time comes, the exit must be gradual and predictable.”
Moody’s Analytics economist Mark Zandi said in May that the U.S. could hit an actual depression if the coronavirus spikes a second time. He said the mass layoffs and the lack of a vaccine would make it difficult for the economy to recover.
Meanwhile, Business 20 warned recently that the global economy was in deep trouble. They said bold action would be needed to help with not only the pandemic, but also various trade wars and tensions between world powers that also threatened the stability of the economy.