Recent days have seen a number of countries publish GDP outturns for the first quarter providing greater clarity on the initial economic impact of the COVID-19 pandemic. Broadly speaking, the picture is bleak with many countries experiencing record-breaking contractions in output. At first glance, the hits to growth appear to be higher in countries that locked down earlier with official data suggesting that the Chinese economy contracted by a stunning 9.8% in the first three months of the year. Amazingly, these numbers were better than many had predicted ahead of the release. That being said, most countries only implemented restrictions on movement in the late stages of the quarter suggesting that worse numbers are still to come. In any case, initial estimates of growth are often published from incomplete source data and statistics authorities’ best guesses of the missing figures, suggesting these numbers are likely to be revised in the coming weeks. Previous Fathom research has shown that initial estimates of UK GDP tend to be revised down during recessions. Given that this crisis is unprecedented in economic history, it is likely that the uncertainty surrounding these numbers is greater than usual.
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