Source: Data from European Centre for Disease Prevention and Control. Note: 7 days moving average.
[NOTE: Figure being updated]
The COVID-19 pandemic can be represented as three major waves in addition to a stealth phase, all of which illustrative of the diffusion cycle of a pandemic.
- First wave (emergence and diffusion). Credible evidence underlines that the COVID-19 pandemic emerged in the city of Wuhan, China, in late 2019. By early 2020, it has diffused throughout the city and also spread across several of China’s major cities. It also started to be recognized as a threat to global health, particularly after national shutdowns measure were initiated in late January, with cities such as Wuhan completely quarantined. This had substantial impacts on Chinese manufacturing capabilities and the related supply chains. By late February, it was looking like the situation was improving as lockdown measures were lifted, and manufacturing activities gradually resumed.
- Stealth phase (translocation). This phase is called a stealth phase because few new cases were reported during this period (late February to mid-March 2020) even if it was realized afterward that the coronavirus was undertaking a phase of translocation from China to Europe and the United States (which in the next wave became the most impacted regions). Travel bans with China were instituted by the United States and many other countries in early February, but bans between the United States and Europe were implemented later in mid-March after it was realized that Europe (particularly Italy and Spain) was becoming the main source of translocation. The lack of testing capabilities undermined the realization that a pandemic was quickly unfolding, with its scale and extent not yet apparent. Adjacent countries to China, namely South Korea, Taiwan, Hong Kong, SAR, and Japan, reported a surge in the number of cases and quickly implemented quarantine measures that turned out to be successful. Outbreaks were reported on several cruise ships that called Chinese ports (or having a large number of Chinese passengers), such as the Diamond Princess (712 cases reported out of a manifest of 3,700 passengers and crew, including 13 deaths). This resulted in the shut down of the global cruise industry by mid-march, as global air travel collapsed.
- Second wave (diffusion and pandemic). By early March 2020, a surge in the number of cases was reported in Italy and Spain, quickly to be followed by the United States. It became apparent that during the “stealth phase”, the coronavirus has translocated in almost all advanced economies and that the virus was now diffusing among local populations. The source of contamination could no longer be traced to an external event such as traveling abroad, as it was the case for most early infections. On March 11, 2020, COVID-19 was officially declared to be a pandemic. Lockdowns were instituted with the bulk of the population ordered to remain home, creating a surge in unemployment, the collapse of travel and tourism, as well as most aspects of manufacturing and retailing. The demand for non-essential goods, including energy, declined substantially. Demand surges for groceries, personal items, and medical equipment placed stress on the related supply chains. By mid-April 2020, in line with the implementation of extensive testing, the number of daily reported cases peaked as quarantine measures positively impacted the diffusion of the virus.
- Third wave (mid pandemic). From mid-April 2020, the number of reported cases in advanced economies was undertaking a gradual decline, in part attributed to lockdown and quarantine measures. With the decline of reported new cases, several economies began to resume normal economic activities. However, the pandemic shifted to areas that were previously relatively unimpacted, likely because of the lack of testing. Russia, Brazil, and India experienced by early May 2020 a surge of reported cases, in line with what happened in Europe and the United States in early March 2020. Due to the lack of testing and reporting, little is known about the extent of the pandemic in many parts of Sub-Saharan Africa and South Asia.
- Fourth wave (late pandemic). From June 2020, the majority of advanced economies were back to normal operations under social distancing measures. Several major developing economies were at their peak level of diffusion. For instance, in early July 2020, Latin American countries, including Brazil, surpassed the United States in the number of reported cases. Further, the United States saw a significant second wave of infections in part because of social unrest placed millions in close proximity and inappropriate social distancing once activities were reopened. The growth of the amount of testing also results in a larger number of confirmed cases, even if the rate of infection can remain similar. In March 2020, about 100,000 COVID tests per day were undertaken in the United States, a figure that increased to 600,000 tests per day by June 2020.
The substantial decline in the demand for goods and services that took place during the second and third wave of the pandemic is likely to have enduring economic consequences in terms of levels of economic activity.