Annual Economic Report 2020

The past year has felt like an eternity. It is probably too early to tell, but future economic historians might consider the Covid-19 pandemic a defining moment of the 21st century. When, just over a decade ago, the Great Financial Crisis (GFC) hit the global economy, it was rightly considered such a moment. 

The Covid-19 pandemic is the most devastating shock to hit the global economy since the Second World War. Policies to contain the virus have deeply undercut economic activity. The recession's unique character poses unfamiliar policy challenges. 

Faced with an unprecedented global sudden stop, central banks were again at the forefront of the policy response. They moved swiftly and forcefully to prevent a potential financial collapse from exacerbating the damage to the economy. 

A vital function of the financial sector is to provide efficient ways for households and businesses to make and receive payments. A sound and well functioning payment system facilitates economic activity and supports long-run economic growth.