As the chart below shows, both new cases and the death rates have peaked globally. The increase in new cases in the US yesterday was 4.4%% (at the peak it was more than 30%). In Western Europe ex Italy, the growth of new cases is only 2.3%. Australia seems to have almost controlled its spread. While most European countries have extended their lockdowns, almost everyone is now making the plans for a gradual resumption of activity. We are changing the name of this report to a Daily ray of hope. We need every bit of it.


Oxford professor Sarah Gilbert thinks that a vaccine should be ready by October. Most people tend to agree with her view. GSK and Sanofi have teamed up to create a vaccine – the scale of the global response to fighting this is quite remarkable.


The EU has made a special office to coordinate between all the member countries for a plan for ending the lockdown. Coordination is essential for dealing with the pandemic. It requires a bottom up plan which is grounded in community level testing and tracing but national and international coordination to end it.


The US market is now up 27% from its trough levels. The US market is now more expensive than it was prior to the crisis – it is now trading on 22x forward PE (due to
earnings cut). This is despite IMF’s warning and expectation of an economic recession as bad as 1930. It expects the global economy to decline by 3%. It has also downgraded Pakistan’s GDP growth in 2020 to -1.5% from an earlier expectation of 2.5%. See chart below.


Some of the gloomy forecasts might be a knee jerk reaction. IMF has the same crystal ball which everyone else has, and it is not too clear right now. All forecast is based on assumptions on how long the lockdowns will remain, when will the virus be available and how does the spread looks like in Africa, South America and South Asia (India). Initial estimations of deaths by the “Imperial College Group” which as formed the basis of policy response in the UK and most of the Western world have proven to be too aggressive. Dr. Faucci in the US now expects 60,000 deaths – substantially lower than the earlier expectation of over 200,000.


The lockdown certainly has a high economic and human cost especially for developing countries. There is news about riots in India due to the lockdown. been filed in the US against China and its army. So, there are some merits in what the PM Khan has been saying – I think he has been saying it at the wrong time. Opening will require a massive ramp up in testing and preparation for a spike in medical cases. The lockdown is the time to prepare.


We pray for the good health of you and your families.

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KASB Ray of Hope: Planning for opening up

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