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COVID Update: Winter of Discontent

The predictions made in our November 4th forecast have sadly materialised. There has been only limited progress made in countries that have implemented a partial lockdown. This means that unless the vaccine begins widespread distribution (which will not be easy in 2021), we do not forecast an appreciable decline in new cases without a full lockdown. Let’s look at the numbers (all taken from the Worldometers Coronavirus page on 12 December 2020):


In Cyprus, a partial lockdown was announced in Limassol and Paphos for two weeks, during which residents of these districts were not allowed to travel to neighbouring districts; an earlier curfew was in place; restaurants were closed; and other limited measures taken. Crucially, public circulation was not affected and offices and schools were not closed.

The results are what we would predict: the second wave has actually grown even stronger, with the number of new cases per day breaching 400 on several days. Absent a full lockdown (or a widespread vaccine), we do not believe half-measures will work.


Greece has implemented a near-full lockdown, and the results are clear from the new cases per day chart below. Specifically, the country has once again restricted movement (any movement outside the home is now solely by SMS); movement between districts is not allowed; a curfew is in place; public authorities and companies must only allow essential personnel to work in person: all others must work from home. Crucially, schools and most public transport remains open. Despite these steps, the number of new cases has decline by approximately 50% from their second wave high: we can easily understand why the measures have been extended to 7 January and why this extension will almost certainly be extended still further.


The track of daily new cases in France shows much the same trend as in Greece. A severe lockdown, which notably includes a curfew; closing of restaurants; movement by SMS; but also open schools and offices; has resulted in a significant decline from the Second Wave peak. However, the number of new cases per day remain high and will be difficult to reduce as long as public transport, schools and businesses remain open for essential personnel.


Of all the European cases examined, Germany is perhaps the most surprising. Germany’s Bundeslaender introduced a new lockdown at the beginning of November. But it would appear that these measures have either not been taken seriously, or are fragmented in their implementation from state to state. The number of new cases has, as in Cyprus, actually been rising.

United States

The number of new cases per day in the United States has breached 200,000 per day in mid-November and is now approaching the 250,000 per day threshold. The United States is one of the few first world countries where the coronavirus and the public health measures against it has become politicised, with the President, the Republican party, the Trump Administration and many Republican state officials ignoring public health advisories and actually becoming super-spreaders of the disease. The results are clear and in line of what we can expect given what we know about this pandemic.

Japan: The Third Wave

Japan is included here as it is the clearest indication (that we know of) that there will be a Third Wave. This clearly indicates that unless there is continued vigilance in public health, the virus will not magically go away. Japan is considered one of the success stories in the fight against the pandemic (especially given its low mortality rate, its high population and the urban congestion of its cities). Despite this, we can clearly see that unless measures are maintained, the virus will continue to spread.

Forecast for 2021

Our forecast for 2021 remains unchanged:

1. The vaccines being developed and now deployed by Pfizer/BioNTech, Modern and Astra Zeneca / Oxford appear to be the best hope of combatting the pandemic in the short term. We cannot say for certain if there will be longer-term adverse impacts from the vaccine, or whether the virus will mutate or not. But as a public health response, this is presently the only rational hope for a return-to-normal scenario.

2. We do not believe enough of the vaccines will be distributed within 2021 to make a significant difference in terms of returning to “normality”. Still, this is the first step to a recovery, assuming the vaccine works and the virus does not mutate.

3. We know that the virus spreads through aerosol and liquid distribution. Therefore, we can understand that prudent policy measures against its spread include personal distancing; the use of face masks and possibly gloves; avoiding crowded spaces; and avoiding spaces such as restaurants where eating without a mask is impossible. We can infer that cities which are more congested in terms of public transport, large building blocks, frequently-used elevators and escalators, and enclosed spaces with poor fresh air circulation are all environments where the virus can spread rapidly.

4. Given (2) and (3), we believe that the first 5 months of 2021 will see high incidents of new cases, absent a real lockdown. We do not believe the partial lockdowns are effective because the rate of exposure through public transport, schools, offices and other environments is still too high.

5. New hope will return around May-June as the summer season kicks in again. However, the continuing problems seen mean that for tourism destination countries such as Cyprus or Greece, we will be lucky to receive more than 35-40% of 2019 arrivals. This is still well below break-even capacity. Nevertheless, the summer of 2021 offers the first hope of a resumption of normal life, at least for a limited time.

6. The long disruption in normal business operations means that many more enterprises will close in the first half of 2021. The only mitigant against this will be further public spending.

7. Operations in October – December 2021 will depend on the progress of vaccine distribution and public health measures still in place. We do believe that maintaining strict measures will be politically impossible given population fatigue. We will probably hit a Fourth Wave then.

8. From the summer of 2021 onwards, the focus will increasingly return to public debt and macroeconomic stability, and the economic progress of at-risk countries such as the United States, Greece, Italy, France and others will be re-assessed with a new eye. There should be, hopefully, a strong growth resurgence in Q2 and Q3 2021 to avoid threats of a serious public debt meltdown. The long-term trends, however, are unpalatable.

As always, if we can support you, please do not hesitate to contact us.

Philip Ammerman

Managing Partner

Navigator Consulting Group


Worldometer. 12 December 2020

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