Interim forecast

The COVID-19 epidemic, in combination with stringent health protection and containment measures, represents a significant negative shock to economic activity, which will contract strongly this year. The depth of the GDP decline and the dynamics of the recovery are (and will be) crucially dependent on the epidemiological situation and the scope and content of economic policy measures. In the baseline scenario of the summer forecast, IMAD predicts a 7.6% decline in GDP this year and 4.5% growth in 2021. Most activities will not yet reach the levels seen before the outbreak of the epidemic. As the virus is still present and some restrictions remain in place, the recovery will be gradual and uneven across activities. Uncertainty and the risks of an even sharper decline in GDP linked to possible recurrences of major outbreaks of the epidemic remain high. The reinstatement of stringent measures to stem the spread of the coronavirus could lead to an even deeper decline in GDP. However, if a vaccine or a medicine is developed and made available soon, or if the spread of the virus is effectively and more permanently contained, activity could recover faster than predicted in the baseline scenario.