One definition of an Economic Depression is "a decline in real GDP exceeding 10%", so we are likely already in a depression. Economists are forecasting for significant improvement in the Q3-Q4 2020. But why things might not get that much better?
Almost all serious respiratory pandemics in the past had at least two waves.
First wave ends with some combination of:
- Herd immunity from those already recovered
- Protective measures (lock-down, social distancing, masks, hand hygiene)
Instead, the second wave occurs with:
- Protective measures mitigation
- Not enough herd immunity
- Cooler weather (generally Q4-Q1)
Since SARS2-Covid is contagious and deadly, most countries have implemented various forms of blockade and will benefit from the summer season (Q3). Unfortunately, the more blocks you have the less immunity of the flocks you get and vice versa. Also, there are growing expectations that individual immunity may be weak and temporary, which could further reduce flock immunity.
As a result, many countries will repeatedly see the blockade with sporadic outbreaks and second waves, until a vaccine is widely available, perhaps in 2021. The vaccine is likely to be annual, like the current flu, to maintain protection from the worst effects of the virus which can easily mutate over time.
Avoiding blockages may be possible with the correct level of distance, wear of the mask (indoors and in crowded places) and hand hygiene. This will allow some countries to avoid complete blockages and have a sort of almost normal economic and social activity, with offices, schools and restaurants operating according to specific rules, while waiting for a vaccine or treatment. This could drastically reduce the spread and effects of the virus, but this is not expected to occur before 2021.