Virus hits US economy but drug trial raises hopes

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WASHINGTON (AFP) – The brutal economic impact of the coronavirus deepened Wednesday as the United States saw its worst slump in a decade, yet there was a ray of hope as patients responded to an antiviral drug in a major trial.

Countries around the world are balancing the desire to ease lockdowns and help their economies against the risk of a second wave of the pandemic that has already killed 214,000 people and infected three million.

Fears that COVID-19 could trigger the biggest global recession for a century heightened with the grim figures from the United States, and further bad news from European powerhouse Germany and a host of major companies worldwide.

But global stock markets still shot higher after US pharmaceutical giant Gilead reported positive results on the use of its drug remdesivir against the respiratory disease in a US government trial.

Top US health and infectious disease specialist Anthony Fauci said remdesivir showed a “clear-cut, significant, positive effect in diminishing the time to recovery” for coronavirus patients.

Speaking at the White House, Fauci said a smaller Chinese study released separately Wednesday showing no benefits from remdesivir was “not an adequate study.”

Experts have warned that only drug treatments or a vaccine can really bring an end to the pandemic but that it could take more than a year to find a cure, leaving the world to rely on lockdowns and distancing measures until then.

The World Health Organization, which has come under fire from US President Donald Trump over its handling of the pandemic, said its emergency committee would meet Thursday for the first time since it declared coronavirus an international emergency three months ago.

Squall before the hurricane

The scale of the impact on the world s biggest economy was revealed Wednesday when the United States announced that economic output collapsed 4.8 percent in the first quarter.

The steepest decline since the Great Recession of 2008, it points to even grimmer reading in coming months and deals a blow to Trump as he seeks re-election in November.

“These data capture only the squall before the second quarter hurricane,” Ian Shepherdson of Pantheon Macroeonomics said.

The country has also reported its millionth coronavirus case, and at over 58,000 the country s COVID-19 death toll is by far the world s highest — surpassing the number of Americans killed in the Vietnam War.

Europe, the worst-hit continent with 130,000 deaths so far, is trying to chart a path out of lockdown.

Germany “will experience the worst recession in the history of the federal republic” founded in 1949, Economy Minister Peter Altmaier warned, predicting that gross domestic product (GDP) is expected to shrink by a record 6.3 percent.

From Wednesday, the capital Berlin joined the rest of country in requiring masks to enter shops as German authorities said they had the disease under control. They are already compulsory on buses, trains and trams.

“It s the right thing,” said Heike Menzel, 54, who was stacking shelves in Bio Company supermarket, wearing a simple black fabric mask. “You re protecting others.”

UK care home deaths

Italy, Spain and France have been the worst affected European countries, with each reporting more than 24,000 deaths but daily tolls appear to be on a downward trend and they are all charting their way out of shutdown.

Spaniards have increasingly embraced home workouts as they wait for a return to normality.

“It s very motivating because we can see each other, talk,” said Ivan Lopez, 45, a Madrid teacher who has been using the Zoom video app for workout sessions with his running group.

But Britain, which still lacks a plan to exit lockdown, dramatically raised its death toll by 4,419 to 26,097, as the country began including deaths in places such as care homes for the first time.

British Prime Minister Boris Johnson, who just weeks ago was hospitalized with the virus, was meanwhile celebrating Wednesday after becoming a father again when his partner Carrie Symonds gave birth to a boy.

The pressure to ease lockdowns is immense as the world economy teeters, with demand for goods gutted and travel and tourism hammered.

The International Labour Organization said Wednesday that half the global workforce — around 1.6 billion people — are “immediate danger of having their livelihoods destroyed”.

Largest decline

One of the worst-hit areas of the world economy is the aviation industry.

World air traffic suffered a massive drop of more than half in March compared with the same period last year, the “largest decline in recent history”, the International Air Transport Association (IATA) said.

US plane-builder Boeing announced plans to reduce its workforce by 10 percent and slash production of its main airliners while European aviation giant Airbus also reported big losses.

The outbreak however appears to be under control in China, the world s second biggest economy, where the virus first emerged late last year in the city of Wuhan.

China s top legislature will hold its annual meeting next month, after having postponed it from March for the first time due to the disease.

While the world keeps looking for signs of progress against the pandemic, research is also revealing frightening new details about the coronavirus.

Britain and France have both warned of a possible coronavirus-related syndrome emerging in children — including abdominal pain and inflammation around the heart.

“I am taking this very seriously. We have absolutely no medical explanation at this stage,” French Health Minister Olivier Veran said.

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