GDP Losses and COVID Deaths (6 month update)

Back in March of this year, I wrote blog posts providing data on GDP losses and COVID-19 deaths for 2020, both for selected countries and US states. Since we’ve now had another 6 months of GDP data and the pandemic continues to take lives, I thought it would be useful to update that data.

I will update the data for US states in a future post, but here is the most recent data for about 3 dozen countries (mostly European and North American countries, since they have the most believe COVID data).

*indicates that the GDP data is only through the first quarter of 2021

For the GDP data, I’ve calculated a “GDP loss” figure to show how much GDP the country “missed out” on in 2020 and the first half of 2021 (for a few countries, marked with a *, the data is only current through the first quarter of 2021). To do so, I look at how much below (or above, in some cases) each quarterly GDP figure was compared with the 4th quarter of 2019. The percentage in the chart is the sum of all these GDP deficits, divided by the 2019Q4 figure. This gives us a bare minimum of how much GDP was lost, because without the pandemic recession there would have been positive growth. My figure just looks at the loss compared with 2019Q4 levels continuing.

The GDP data is mostly from the OECD, as well as from the statistical agencies of a few countries to supplement the OECD data. It should all be in real (inflation-adjusted) terms and seasonally adjusted, so the data should be comparable across countries.

These numbers are a little different than we are used to seeing for GDP, so let me briefly explain by way of example. Looking at the US data, we see that it is about -17%. But keep in mind that US GDP is now slightly above where it was in 2019Q4 (about 0.8%). But for the 5 quarters from 2020Q1 to 2021Q1, US GDP was below the level of 2019Q4 (the baseline), even though it was growing for most of these quarters. So adding up the 5 quarters where GDP was below 2019Q4 plus the one (2021Q2) where it was above the baseline, this works out to a total of 17% of “missed GDP.”

Some countries are much worse than this: Spain is still below the baseline GDP level from 2019, and the missed GDP adds up to 61%. In other words, Spain missed out on over half of one quarter’s worth of GDP (or about 15% of annual GDP). Wow! Taiwan is at the opposite extreme, with no cumulative losses of GDP, though they did have some small loses in the first half of 2020 that were outweighed by the gains in the next four quarters. Taiwan’s +21% figure doesn’t mean GDP has grown by 21% though — that’s 21% more GDP than a single quarter (2019Q4).

For the COVID death data, I use the most recent figures from Our World in Data. There is always some question of exactly how accurate these figures are. They are reported by the countries themselves, though this group of countries is generally using the same definition. Ideally, data on excess mortality would be a better measure to show the impact of the pandemic as well as social and government responses. Again, I will save that for a future post, mostly because this data not only lags, but lags differently for each country.

So that’s the data, but what can we learn from it? As with past charts like this that I have made, I would be very cautious about drawing too many conclusions from this data alone. It’s just a first step in trying to visualize the impact of the pandemic, recession, and the responses to these two things.

One thing we can definitely say is that there was a very wide range of impacts on these countries, even if we just focus on Europe which should be comparable along many lines. Major European countries like Spain, the UK, France, Italy, and Portugal had major impacts on both mortality and the economy. It was really bad. Could one or other measures have been marginally improved with a different set of social and policy responses? Again, this chart can’t tell us that.

But what it can tell us is that even within the band of, say, 1,500-2,000 COVID deaths per million, there was widely varying economic harms. Poland the UK had roughly the same number of deaths, but the economic hit was about 4 times worse in the UK. Is this because of policy (“lockdowns”)? Because of connections with international trade? These and many other possibilities will be studied in great detail in years to come, but ultimately it will be very hard to draw firm conclusions.

Similarly on the GDP axis, there are a lot of countries that are in the band of 5% to 15% GDP losses (remember, that’s a loss as percentage of one quarter of GDP). But the deaths vary dramatically, from almost none in Australia, New Zealand, South Korea, Norway, and Finland, all the way up to Poland having deaths on par with the UK. Clearly Australia, New Zealand, and to some extent South Korea took a different path by shutting themselves off from the rest of the world and having harsher domestic policies. But what of Norway and Finland? Do they have lessons to give to other countries? Or are they just anomalies and/or lucky?

And as with all this data, we should caution that the pandemic isn’t over yet. Though as vaccinations become much more widely distributed both across and within countries, there is hope that we will eventually have the “final data” on this chapter in history. Then, the real analysis can begin. For now, even with piles and piles of data, and seemingly just as many opinions out there, we still don’t have a really good idea of what the optimal set of policies should have been to address (or not address) this pandemic.

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