Global Uncertainty Related to Coronavirus at Record High

IMF Blog, April 4, 2020

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New measure: World Pandemic Uncertainty Index (WPUI) — a sub-index of the World Uncertainty Index for 143 countries starting in 1996.
Construction method: tally the number of times “uncertainty” is mentioned near a word related to pandemics or epidemics in the Economist Intelligence Unit (EIU) country reports; scale raw counts by the total number of words in each report to make the WPUI comparable across countries.

As of March 31, uncertainty related to the coronavirus is unprecedented.
The level of uncertainty related to the coronavirus is three times the size of the uncertainty during the 2002–03 severe acute respiratory syndrome (SARS) epidemic.
The level of uncertainty related to the coronavirus is about 20 times the size during the Ebola outbreak.
Uncertainty around the current pandemic increased first in China and is now visible in many countries worldwide.
High levels of uncertainty related to the coronavirus have been recorded in several economies with a significant number of cases: France, Germany, Iran, Italy, Spain, Switzerland, the United Kingdom and the United States.
Uncertainty around disease outbreaks is highest in advanced and emerging market economies and, while rising, it remains at low levels in low-income economies.
High uncertainty historically coincides with periods of lower growth and tighter financial conditions; the current level is already associated with visible economic impacts in the countries most affected by the outbreak.

Increased coordinated action internationally will be key to boosting confidence and providing stability to the global economy as the virus spreads.

IMF Blog — Hites Ahir, Nicholas Bloom, Davide Furceri; April 4, 2020