What comes next? Recovery from an uneven recession

BIS Bulletin  |  No 33  | 
02 December 2020

Key takeaways

  • The effects of the Covid crisis have been felt unevenly across sectors, and the output of customer service industries could remain well below its pre-Covid trend for some time.
  • Economies with large customer service industries could grow more slowly in the near term, even after accounting for the stringency of containment measures and the severity of virus outbreaks.
  • Model projections suggest that large advanced economies could face a "98% economy" until constraints on customer service industries ease. The outlook for some economies, such as China, is more positive.
  • While demand stimulus remains necessary in the near term, it will not be sufficient to return economic activity to its pre-Covid trend. That will require public health measures to control the spread of the virus and steps to ease resource reallocation to industries less affected by the pandemic.

Online appendix