Do social restriction policies responding to COVID-19 pandemic associated with economic growth?

Abstract

The purpose of the study is to examine the statistical relationship between restriction and containment policies in respond to COVID-19 pandemic and the countries’ economies. This study also maps countries based on their economic growth and the public mobilization restriction policies. The GDP growth was extracted from the economy prognosis from the International Monetary Fund. To determine the restriction policy level, the stringency index (SI) produced by the Oxford COVID-19 Government Response Tracker (OxCGRT) was used. The SI is between 0 – 100 in a range that is computed based on containment and closure policies, for instance, stay at home requirement and closure of public facilities, and public events. The SI used in this study is the average score of the first 3 months after the WHO declared COVID-19 as a pandemic (11 March 2020). Using the Spearman correlation test to investigate the relationship between GDP growth and restriction level in 166 countries, this study demonstrates a negative association between GDP growth and the SI. This means that countries that imposed stricter policies in the early COVID-19 pandemic tend to have higher GDP contraction. However, the correlation coefficient is relatively weak (-0.200), and thus, every government has the opportunity to reduce the unintended outcomes of restriction policies by providing economy and financial support packages for businesses, people, and other affected groups.