How these countries are facing fresh economic costs by reacting to new spikes of the virus

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Prime Minister Jacinda Ardern announced on Monday that New Zealand’s general election would be postponed by a month, to October 17, due to an outbreak of coronavirus in Auckland, the country’s largest city.

– New Zealand had eliminated the pandemic in June, but is facing a new spike that has led to the quarantine of dozens of people. Officials have acknowledged that they still don’t have clues as to how the virus was reintroduced and transmitted in the country.

– In Australia, the state of Victoria registered its deadliest day of the disease, with 25 fatalities overnight. More than two-thirds of the fatalities since the beginning of the outbreak have been associated with aged-care homes.

– Japan’s gross domestic product fell 7.8% in the quarter ended in June, the worst fall since such data started being collected in 1980, due notably to a steep drop in both consumer spending and exports. That compares with a 9.5% GDP decline in the U.S., and a 11.7% fall in the European Union.

The outlook: New spikes of the virus in many parts of the world place governments in a real dilemma: How to react without killing the nascent recovery? But markets have chosen to ignore the fact that, at some point, more drastic restrictions may have to be ordered, yet again, to control the pandemic. New borders are being erected, with quarantine or other travel limitations. And some of the easing decisions taken in May throughout Europe are being canceled. All of this will have an economic cost.