Economic activity picking up in Asia: Goldman Sachs CEO David Solomon

Despite the world being ravaged by COVID-19 disruptions, Goldman Sachs Chairman and CEO David Solomon feels economic activity is picking up in Asia and this is happening market-by-market.

He made the observation in a conversation with IHS Markit chairman and CEO Lance Uggla, wherein he lauded the swiftness of economic relief by the world’s governments while also comparing the pace of recovery in Asia as compared to the trajectory of Europe and the US.

Citing the example of Hong Kong, Solomon said they were able to have about 30 percent of their employees back in the office.

"My guess is we'll get to about 50 percent there in the coming weeks," he said.

He also gave the example of companies like Nike and Apple that are operating in China, who have reportedly got back about 80 percent to 90 percent of their foot traffic. This, he said, is encouraging and a sign of improving economic activity.

There are a few things that were a late phenomenon in the European and American countries, as opposed to their Asian counterparts.

"There are a number of things that have helped there. I think one of the things that have helped—and I think we'd be in a very, very different place in the United States and Europe—masks are part of the culture there. They did at the beginning, they got through the crisis and we were just very late to that in Europe and the U.S. I think that made a big difference," Solomon said.

He said that even though this wouldn't have alleviated the problem entirely, but there would have been an impact on the way the infection scaled up.

On the subject of comparisons drawn between the 2008 financial crisis and the current pandemic-led economic crisis and government responses in both the cases, Solomon remarked that there was a very quick government response the world over to dampen the economic impact of the crisis.

While there were a few similarities in the responses during the earlier and the current crises, he added that there are some differences too.

"One of the biggest differences is it's happening very quickly," the Goldman Sachs CEO said.

He added, " I think one of the reasons why it can happen more quickly, and I'll say in the United States, just for starters, is that in the 2008 financial crisis financial institutions were at the center of it. There were issues around lending and bad practices that played a role in exacerbating that. But here you have a situation where it's affecting everyone in a very even-handed way—and it's hard. So, there's not the political blockage to getting that monetary and fiscal stimulus moving."

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