Social Distancing Amid the Pandemic -May 11 Update

May 11, 2020 – Is there a way to gauge how much the COVID-19 pandemic is going to affect an individual economy? Conceptually, you could argue that economies experiencing tighter social distancing may also experience more negative shocks in their domestic sectors. Collecting that data across economies could provide some insights into the comparative degree of impact in different regions.

To gauge the degree of social distancing in a country, we summarize data on mobility provided by both Google and Apple for the week ending May 2, 2020. These reports provide people’s frequency of visits and length of stay at categorized places compared to a baseline of ‘normal’ from earlier this year.

Google Mobility Report

The Google COVID-19 Mobility Report provides people’s frequency of visits and length of stay at six categorized places compared to the baseline, which is the median value from January 3 to February 6 this year. We simply averaged the four factors (1) Retail & Recreation; (2) Transit Stations; (3) Workplaces; and (4) Grocery & Pharmacy to compare the degree of social distancing across 78 economies. This is summarized in the Social Distancing Index. A lower (or higher) value of the index implies more (or less) social distancing.  Note, the low penetration rate of smartphones for some frontier Emerging Market economies suggests that the data may not be entirely reflective of those economies as a whole.

As of May 2, overall mobility of Peru, Philippines, Colombia, India, Malaysia, Italy, Spain, the U.K., New Zealand, Singapore, and Saudi Arabia contracted by more than 52%, compared to early this year. The economies under tighter social distancing may experience more negative shocks in the domestic sector than others. On the contrary, we see relatively lenient social distancing in South Korea, Taiwan, Hong Kong, Sweden, Vietnam, the U.S., and Germany.

On a week-over-week comparison, social distancing in the Global economy has further loosened on May 2. It was led by Slovakia, Peru, Spain, Italy, South Africa, Argentina, New Zealand, Canada and the United States.

Social distancing is likely to be further mitigated in the second quarter as the pandemic may have passed its first peak in many regions. The lock-down measures would be lifted from major 25 economies within the second quarter of 2020. Having said that, we think economic recovery will likely be only gradual. At the global level, “play” sectors may experience deeper contractions and lengthier returns to pre-COVID-19 gross value added levels. Alternatively, “work” industries are poised to have shallower contractions in growth and likely shorter recovery periods.

However, tighter social distancing will probably maintain in several EM economies. The new confirmed cases are still surging in Russia, Peru, India, Saudi Arabia, Mexico, Pakistan, Belarus, Qatar, UAE, Indonesia and South Africa as of May 7. We also see diverging trends of new confirmed cases in the U.S., between the four states (New York, New Jersey, Connecticut and Pennsylvania) and the other states.