The brutal economic impact of the coronavirus deepened on Wednesday with dire news from the United States and Germany, increasing pressure worldwide to ease lockdowns and reduce the cost of the pandemic.

Countries around the globe are balancing fears of the worst global recession for a century against the risk that lifting restrictions too fast will cause a second wave of the virus that has already killed 214,000 people.

But with the United Nations warning that half the global workforce risks having their livelihoods destroyed and the United States announcing a dramatic end to a decade of growth, the economic pain caused by the outbreak is mounting by the day.

The aviation industry also unveiled grim new tidings of the damage caused by worldwide travel bans aimed at halting the spread of a disease that has infected three million people worldwide.

The United States, the world’s biggest economy, announced that economic output collapsed 4.8 per cent in the first quarter of the year as COVID-19 hit, the steepest decline since the Great Recession of 2008.

“These data capture only the squall before the second quarter hurricane,” Ian Shepherdson of Pantheon Macroeonomics said, warning that far worse could be ahead.

Europe’s powerhouse Germany meanwhile “will experience the worst recession in the history of the federal republic” founded in 1949, Economy Minister Peter Altmaier warned.

Germany is one of many across Europe easing its restrictions. From Wednesday, the capital Berlin joined the rest of country in requiring masks to enter shops. Nose and mouth coverings are already compulsory on buses, trains and trams.

Italy, Spain and France have been the worst affected European countries, with each reporting more than 23,000 deaths but daily tolls appear to be on a downward trend and they are all charting their way out of shutdown.

Spaniards have increasingly embraced home workouts as they wait for a return to something approaching normality.

“It’s very motivating because we can see each other, talk,” said Ivan Lopez, 45, a Madrid teacher who has been using the Zoom video app for workout sessions with his running group.

Britain, the fourth worst affected European nation with more than 21,000 deaths, still lacks a plan to exit lockdown.

The pressure to ease lockdowns is immense as the world economy teeters, with demand for goods gutted, travel and tourism hammered and big banks reporting deep falls in quarterly profits.

The International Labour Organization  (ILO), said on Wednesday that around 1.6 billion people − half the global workforce and a three quarters of workers in the informal economy − are “immediate danger of having their livelihoods destroyed”.

The crisis is affecting all parts of the economy, but one of the worst-hit areas is the aviation industry, affected by travel bans and border closures around the globe.

World air traffic suffered a massive drop of more than half in March compared with the same period last year, the “largest decline in recent history”, the International Air Transport Association (IATA) said.

US plane-builder Boeing announced plans to reduce its workforce by 10 per cent and slash production of its main airliners while European aviation giant Airbus also reported big losses.

The impact is also still being felt by cultural and sporting events.

Japanese Prime Minister Shinzo Abe said on Wednesday it would be “difficult” to hold the postponed Tokyo Olympics if the pandemic is not contained, while the International Olympic Committee said the delay would cost it several hundred million dollars.

The outbreak however appears to be under control in China, the world’s second biggest economy, where the virus first emerged late last year.

China’s top legislature will hold its annual meeting next month, after having postponed it from March for the first time due to the disease.

Meanwhile, global stock markets shot higher on Wednesday after a US company reported positive results on the use of its anti-viral drug Remdesivir against the new coronavirus which more than offset news of a massive downturn in the American economy.

Meanwhile oil prices spiked, with US benchmark oil WTI soaring by more than a third, following data showing crude Stockpiles in the United States rose less than expected.

US and European Stocks both advanced after Gilead Science said that remdesivir, one of the most highly anticipated drugs being tested against the new coronavirus, showed positive results in a large-scale US government trial.

It said the National Institute of Allergy and Infectious Diseases would provide more information.

“The US recession is beginning, but financial markets seem to only care about Gilead’s remdesivir,” said market analyst Edward Moya and online currency trading firm Oanda.

Agencies