The coronavirus pandemic has lowered potential output in the euro area. Labour, capital, and total factor productivity were all affected. Read more in the #EconomicBulletin [1/4]
ecb.europa.eu/pub/economic-b…
ecb.europa.eu/pub/economic-b…
Estimates of potential output are uncertain and will change as the situation evolves and as the pandemic’s economic impact becomes clearer. Yet, it is already evident that potential output is likely down less than GDP – indicating a negative output gap [2/4]
Digitalisation is likely to have accelerated in many firms across different sectors in response to the pandemic. This positive development may enhance productivity growth in the medium term [3/4]
The speed of economic recovery is highly uncertain and depends on how the pandemic and related containment efforts evolve. But it is clear that fiscal and monetary policy measures play a pivotal role in protecting the economy from a persistent shock and excessive damage [4/4]
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