Coronavirus: Need for strong policy reaction – BNP Paribas

The necessary measures to stop the spreading of the pandemic have a profound impact on the economy causing a recession which is expected to be deep and short, Willian De Vijlder from BNP Paribas briefs.

Key quotes  

“INSEE communicated this week that the loss of activity due to one month of confinement, could lower annual GDP by 3%. A confinement of two months would have an impact on annual GDP of 6%.” 

“The Ifo Institute calculated that in case of a partial standstill for two months ‘the costs will range from EUR 255 to 495 billion, depending on the scenario. That means output for the year will shrink by 7.2 to 11.2 percentage points’.”

“The lifting of the lockdowns will, mechanistically, trigger a rebound in activity but additional stimulus will probably be needed to maintain the momentum.”