Lockdowns shutter one fifth of the economy

The latest hard data suggest economic activity was running 20% below February levels in April, a far sharper downturn than the 2008/09 financial crisis and one compressed into just two months. With lockdowns easing the economy is now beginning to recover, but the high frequency data we track suggest the initial rebound is proving to be slow going. Assuming the number of new infections falls further, the recovery should gather pace, allowing economic activity to stage at least a partial rebound in the second half of the year. But with the disruption likely to inflict longer-lasting damage on some sectors like travel and leisure, we think GDP will remain below its pre-virus trend for years to come.