A lockdown is getting closer as the number of infections increases faster and the maximum capacity of healthcare is approaching. One of the lessons of the first wave is that economic damage occurs before the economy is partially locked with a lockdown.
ING saw, for example, that at the beginning of this year, spending in some sectors was already falling before stores had to implement a door policy. People no longer went to the store out of caution against the virus. “But the reaction with a second wave does not have to be the same as with the first,” says Blom. “For example, we know a lot more about the virus. In the spring we still assumed that 20 percent of the people who have the virus would have to go to hospital. Now we know that that is one or one and a half percent.”
ING has not yet seen such a ‘caution effect’ in recent weeks. “Turnover in bars and restaurants even increased slightly”, says Blom. “Turnover in clothing stores did decline. However, we think that the weather played a more important role: you would rather go to a terrace than to a shop and you are not cold, so no reason to buy warmer clothing.”
Support packages more sober
The cabinet has reserved a great deal of money for absorbing economic blows. Compared to the first aid packages, the schemes are now more austere and are being phased out. The cabinet may be forced to expand the packages again, if the second wave continues considerably. Even more than now, the question will be asked: which companies do you help and which not? A difficult question, because viability as a criterion is also surrounded by uncertainty.
“You don’t know yet what will be ‘viable’ in the future,” says Blom. “It is partly determined by the policy you are pursuing now, and how it works out. You can, however, conclude that there are sectors whose viability will be much less viable for the time being than before corona, such as aviation.”
“ Keep Supporting Generously ”
Transport, the catering industry and the travel industry are most often mentioned as sectors where the damage is still somewhat contained due to the aid measures, but which could suffer heavily in the next lockdown.
Blom pleads for generous support until there is more clarity about how the pandemic can be brought under control, for example if much more testing can be done. “Phasing out the support will lead to additional bankruptcies and more unemployment, and it is too easy to assume that growth sectors will automatically flourish extra. In an economy where demand is falling, companies will not invest heavily in new activities.”