We think it will take the economy a few years to recover from an unprecedented hit to GDP of around 25% triggered by the lockdown implemented to contain the coronavirus. That’s because despite the unparalleled speed and size of the monetary and fiscal stimulus put in place to mitigate the long-term economic effects of the lockdown, the unemployment rate will probably still leap from 4% to 9% and many businesses will go bust. By the end of 2022 the economy may be 5% smaller than it would have been if the virus never existed and the cumulative loss since the end of 2019 may add up to a huge 20% of GDP.
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