When the COVID-19 pandemic hit Argentina, the economy was already in recession and uncertainty was high, in particular regarding the restructuring of the high public debt. While the timely containment measures mitigated the spread of the virus, they reduced production capacity and domestic demand. With the gradual lifting of the lockdown, domestic demand will recover, but remain subdued due to higher unemployment and lower household incomes. A significant rebound of investment will depend on a successful restructuring of public debt. GDP is projected to fall by around 10% in 2020 in the event of a second virus outbreak and another dip in economic activity later in the year (the double-hit scenario). If this does not occur, a faster recovery is possible, with GDP declining by around 8¼ per cent in 2020.

Economic activity collapsed in the second quarter of 2020, as lockdown measures to fight the pandemic required many businesses to suspend activities and consumers to stay home. However, confinement has been less strict than elsewhere thanks to the relatively mild virus outbreak. Massive macroeconomic policy support, including a temporary wage subsidy, is limiting the economic shock. Most economic restrictions are planned to be unwound by July. However, should widespread contagion resume, with a return of lockdowns, confidence would suffer and cash‑flow would be strained. In that double‑hit scenario, GDP could fall by 6.3% in 2020. Even in the absence of a second outbreak, GDP could fall by 5% in 2020.

The COVID‑19 outbreak has been relatively contained so far and the lockdown started to be gradually lifted in mid-April. GDP is projected to contract by 6.2% in 2020 if there are no further virus outbreaks (the single‑hit scenario), and by over 7% if there is a renewed outbreak later this year (the double‑hit scenario). Economic activity will pick up as confinement measures ease, but the economic recovery will nevertheless take time, with output still below its pre-crisis level by the end of 2021. Unemployment, and the number of people on short-time work schemes, has soared and is projected to remain high through the projection period. Given additional spending as part of the policy response and weaker tax revenues, a large government budget deficit will open up. The comparatively low rate of inflation is expected to slow in the near term, picking up somewhat in 2021.

In case of a second pandemic wave later this year (the double-hit scenario), the contraction of GDP in 2020 is set to reach about 11%, but close to 9% if there is no further outbreak (the single‑hit scenario). In both cases, GDP is projected to remain well below the pre-crisis level in end‑2021. The recovery will be much weaker in the double-hit scenario due to larger permanent income and employment losses, as well as much weaker financial position of businesses, weighing further on consumption and investment.

The economy was finally recovering from a long recession when the COVID‑19 outbreak hit, and is now projected to suffer a further deep recession. GDP is expected to fall by 9.1% in 2020 in the double‑hit scenario, which assumes that a second wave of the pandemic will take place in the last quarter of 2020, and 7.4% in the single-hit scenario, which assumes there are no further outbreaks. As lockdown measures are eased and activity resumes, the economy is projected to recover slowly and partially, but some jobs and firms will not be able to survive. Unemployment will reach historic highs before receding gradually.

The economy was growing robustly before the pandemic shock, but in 2020 faces the largest contraction since the late 1990s. While the two‑month confinement has been lifted, a rapid recovery is unlikely given continued distancing measures, the vulnerable position of households, and pervasive uncertainty as well as weak external demand, especially from Europe. A second COVID‑19 wave in 2020 (the double-hit scenario) would lead to an economic contraction of about 8% and of 0.3% in 2021. Unemployment would in this event almost double after employment had reached historical highs in 2019. On the positive side, the country seems to have to date contained the virus, with a low number of reported deaths. If the virus outbreak subsides by the summer (the single‑hit scenario), a more rapid recovery in private consumption and investment would lead to a lower output contraction of 7.1% in 2020.

Annual output is projected to shrink by 9.4% in 2020 in the event of a second virus outbreak and related shutdown, and by 8% if recovery is uninterrupted. The rebound will not be dynamic enough for output to attain pre‑COVID‑19 levels by the end of 2021 under either scenario. Similarly, the rate of unemployment will still be elevated. Fiscal balances will deteriorate sharply from additional spending commitments and tax‑revenue losses and then recover somewhat thanks to declining outlays in support payments and recovering incomes. Weak demand will push down consumer price inflation.

After the social protests of late 2019, the COVID‑19 outbreak and the drop in commodity prices will push the economy into its deepest recession since 1982. If a second outbreak occurs later in the year, GDP will decrease by 7% and will start rebounding only in 2021. Should the current pandemic subside, a recovery led by consumption will start in the third quarter of 2020, even though GDP will still fall by 5.6% in 2020. Trade will remain depressed by a sluggish global recovery.

Following the steepest quarterly collapse on record in the first quarter, GDP will fall by around 3.7% in 2020 if there is a second virus outbreak later in the year and by a percentage point less if a further outbreak is avoided, before rebounding in 2021. The COVID‑19 outbreak disrupted economic activities around the country and many businesses remain shut even though lockdown measures have been lifted. The pandemic triggered an increase in precautionary saving and eroded consumer confidence, weakening short‑term consumption prospects. Infrastructure investment will hold up growth amid collapsing private investment and foreign demand. If the virus outbreak returns, the second shock to the economy will be much smaller than during the first outbreak, which occurred during the holiday season when most people were away and thereby were not able to return to work due to lockdowns.

The economy is entering a deep recession, the worst in a century, driven by domestic confinement measures necessary to limit the spread of COVID-19, the global economic contraction, lower oil prices, and tightening financial conditions. Should a second outbreak occur in late 2020 GDP will decrease by 7.9% in 2020 and a slow gradual recovery will be delayed to 2021. If the pandemic is tamed after the current outbreak, GDP is expected to fall by 6.1% in 2020. The recovery will be moderate, led by improvements in consumer confidence and a gradual recovery of investment helped by a lower corporate tax burden introduced in a 2019 tax reform. A weak external environment will keep trade depressed and raise vulnerability to already low commodity prices.

Economic activity is projected to contract by around 5% in 2020, before rebounding by 1½ per cent in 2021, if there is a second COVID-19 outbreak in the autumn of 2020. The protracted recovery will hinge on the delayed normalisation of tourism, with the affected sectors likely to be subject to near complete shutdowns until the last quarter of 2020. If the pandemic subsides soon, GDP will shrink by about 4% in 2020 and expand by around 2¾ per cent in 2021, due to a stronger recovery in domestic demand and exports. Headline inflation will initially decline more than core inflation due to subdued energy prices. The surge in unemployment will depress private consumption.

The spread of the COVID-19 pandemic has been contained effectively and the government has started to lift containment measures gradually. Nevertheless, the lockdown and disrupted supply chains have had a deep adverse economic impact. If a further virus outbreak returns before the end of the year, GDP is projected to decrease by 13.2% in 2020. If, on the other hand, the virus outbreak subsides in the coming months, GDP may fall by 9.6%. The economy is projected to recover only partially by end‑2021. Bold policy support will help the economy recover from the crisis, but unemployment will rise significantly from low levels.

Containment measures to curb the pandemic and associated uncertainty will cause a sharp contraction in economic activity, by more than 7% in 2020 if there is another virus outbreak later in the year (the double‑hit scenario) and by almost 6% if further shutdown measures are avoided (the single-hit scenario). A second outbreak would result in significant scars from prolonged unemployment and many bankrupt businesses, delaying the recovery. In the single‑hit scenario, the brief and more limited shutdown than in other OECD countries combined with sizeable government support will limit economic and well‑being costs. In both scenarios, favourable export specialisation partly weathers the initial trade disruptions, but eventually external demand will largely determine the recovery path.

The COVID-19 outbreak is having a sharp impact on the economy. A second virus outbreak would delay the return of consumption and investment, which, together with the impact of virus confinement measures, could reduce real GDP by 10% in 2020. If the virus outbreak subsides by the summer, there would be a quicker recovery in consumer and business confidence and the fall in output would be lower, at 8.4% in 2020. Virus containment measures have been successful and widespread testing is readying the economy to open up. The large rise in unemployment is concerning given that it may erode the substantial activation of disadvantaged workers that has occurred in recent years.

Lockdown measures to suppress the COVID‑19 pandemic have led to a major recession. If a second pandemic wave takes place later this year (the double-hit scenario), GDP is projected to contract sharply by 11.5% in 2020, and the unemployment rate will exceed 12% by end-2020, despite widespread use of short-time work schemes. If the virus remains contained after the end of lockdowns in spring 2020 (the single-hit scenario), GDP will fall by over 9% this year, the unemployment rate will reach double digits and average Maastricht public debt will exceed 100% of GDP by the end of the projection horizon. Substantial monetary and fiscal support will underpin the recovery once the lockdowns are lifted, but output and employment will still be much below pre-pandemic levels by end‑2021, especially in the double-hit scenario, heightening risks of persistent scarring effects, including larger divergence across the area.

The COVID‑19 pandemic has pushed Finland into a deep recession, with private consumption and investment as well as exports plunging in the first half of the year. In the event of a second virus wave, GDP is projected to fall by 9.2% in 2020 and to increase by only 2.4% in 2021. Absent a second virus wave, the decline in GDP will be smaller and the subsequent increase greater. A gradual recovery will be led by exports and consumption. Investment will be slower to recover owing to weakened balance sheets, low capacity utilisation and high uncertainty. Unemployment and bankruptcies will soar, although less so should there be no need for another shutdown.

France is facing a deep recession, as consumption and investment fell sharply during the confinement period. If the pandemic is contained by the summer, real GDP will fall by about 11.4% in 2020 and rebound by 7.7% in 2021. Yet, if there is a second virus outbreak in autumn, GDP is projected to decrease by 14.1% in 2020 and to rebound by 5.2% in 2021. Policy measures such as the strengthened short‑time work scheme will help contain the rise in the unemployment rate, but it is set to peak at respectively 12.4% and 13.7% by end‑2020 in the two scenarios. Despite government support, investment and consumption will recover only progressively since high uncertainty is set to persist. The fiscal deficit will reach 10.4% and 12.0% of GDP in 2020 in the two scenarios, and the downturn will push the debt‑to‑GDP ratio (Maastricht definition) to 116% and 126% by end‑2021.

The German economy is facing a deep recession, with a decrease in GDP by 8.8% in 2020 if a second COVID‑19 outbreak requires further containment measures or prolongs uncertainty. The fall in GDP is estimated at 6.6% if the virus subsides by the summer. Containment measures have been shorter and less stringent than in other major European economies, thanks to widespread testing and high health sector capacity. This has moderated the economic downturn, but uncertainty and reduced demand are still having a significant effect on business investment and exports in key sectors, in particular manufacturing. A second outbreak would undermine the benefits of an early and well‑managed reopening. Increased uncertainty would underpin greater precautionary saving by consumers and weigh on investment at home and abroad, with negative consequences for Germany’s capital goods exports.

The COVID‑19 pandemic and containment measures are projected to reduce GDP by 8% in 2020 if there are no further virus outbreaks (the single‑hit scenario), before it recovers by 4.5% in 2021. In there is a second virus outbreak later in the year (the double-hit scenario), the fall in GDP in 2020 will amount to 9.8%. The losses in output, employment and the budgetary costs from this crisis are projected to be less severe than the crises over 2009‑16. While Greece has contained the pandemic effectively, the negative impact on tourism, investment and public finances is a setback to Greece’s longer‑term recovery.

The COVID‑19 pandemic is causing severe economic disruptions due to closures in manufacturing and large parts of the service sector, and an abrupt decline in international trade. Economic activity is projected to fall by 10% in 2020 if there is another virus outbreak later in the year (the double-hit scenario) but should recover in 2021, bolstered by the release of pent-up demand. In the single-hit scenario, where there are no further outbreaks, GDP is expected to fall by 8% and the recovery would be faster.

Economic activity is projected to drop by more than 11% in 2020 if there is a renewed virus outbreak (the double‑hit scenario as foreign tourism, which collapsed with the crisis, will be down until the end of the year. In the single-hit scenario, where further outbreaks are avoided, GDP will fall less as growth in Europe and the United States recovers and international travel resumes more rapidly. Government spending partially compensates for the decline in household consumption and business investment. Debt will remain below levels reached after the 2009 financial crisis. Despite a relatively resilient labour market, the unemployment rate will peak later this year at over 9% in both scenarios.

The single hit scenario assumes that the 10-week general lockdown, followed by some targeted lockdowns, succeeds in avoiding an acute health crisis. In the double-hit scenario, a renewed virus outbreak will require a new general shutdown in the autumn. New restrictions on internal migration and disruptions in supply chains would have severe consequences on activity and income while external demand would falter again. In this case, GDP is projected to fall by 7.3% in FY 2020-21, compared to 3.7% in the single-hit scenario. The poor, informal workers and small enterprises will suffer disproportionately; weak bank and corporate portfolio positions will keep the investment rate low, weighing on growth prospects. Inflation remains under control given economic slack and low oil prices. Public deficit will spike, reflecting faltering tax receipts and needed spending to support people, banks and small enterprises.

Following the outbreak of COVID-19, GDP is projected to contract in 2020, for the first time since the 1997 Asian crisis, by 2.8% or 3.9% depending on the scenario. The recovery will be subdued, with employment and income losses holding back private consumption, and by end-2021, GDP is projected to be 8% to 10% below its pre-crisis trend level depending on whether a second global wave of infections occurs later in 2020. The socio-economic consequences of the recession will be severe, notably for lower middle class groups, which are at great risk of falling back into poverty.

The economy is set to contract strongly in the first half of 2020 amid a strict lockdown. Supportive economic policies are cushioning workers and businesses from the full impact of the shock. However, depressed confidence and impaired household and business balance sheets will hold back the recovery as the economy further reopens. The second wave of virus assumed in the double‑hit scenario entails additional business closures and job losses, delaying the recovery and threatening to entrench long‑term unemployment and risk aversion by firms. If this were to occur, annual GDP would decline by 8¾ per cent in 2020 with virtually no recovery in 2021. If a further outbreak is avoided (the single-hit scenario), GDP would fall by 6¾ per cent in 2020 and then recover by 4¾ per cent in 2021.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

GDP is projected to fall by 14% in 2020 before recovering by 5.3% in 2021 if there is another virus outbreak later this year (the double‑hit scenario). If further outbreaks are avoided (the single‑hit scenario), GDP is projected to fall by 11.3% in 2020 and to recover by 7.7% in 2021. While Italy’s industrial production may restart quickly as confinement measures are lifted, tourism and many consumer‑related services are projected to recover more gradually, weighing on demand. The COVID-19 outbreak and containment measures will leave output lower at the end of 2021 in both scenarios than at the start of the crisis and will reverse the gains in employment of recent years.

In 2020, Japan is on course to experience its deepest recession of the post-war era, with at best a modest recovery in 2021. Economic activity has plummeted in the first half of 2020, reflecting the impact of incrementally stepped-up confinement measures and lower external demand. Large‑scale fiscal support and the gradual lifting of the confinement measures will help to partially reverse the collapse but, in the event of a second outbreak later in the year, re-confinement would impart another economic blow. GDP is expected to fall by 6% in 2020 in the single‑hit scenario and by 7¼ per cent in the double‑hit scenario. Headline inflation is projected to turn negative in 2020, reflecting considerable economic slack and a fall in energy prices.

Korea was among the first countries hit by COVID-19. Due to an effective strategy to contain the spread of the virus, the government limited the damage to the domestic economy and output is shrinking less than in any other OECD country. Nevertheless, private consumption is contracting, as households exercise caution and suffer from income losses. Unemployment is rising, particularly for non-regular workers. Real GDP is projected to decline by 1.2% in 2020 in the single-hit scenario and by 2.5% in the double-hit scenario. The global recession will hold back exports and investment, especially in the event of a second global wave of infections.

Economic growth slowed before the pandemic started and is projected to contract sharply in 2020, despite a relatively lenient lockdown. Activity will recover, but gradually, as uncertainty will remain high and activity in some service sectors will remain subdued. Domestic demand will drive the recovery, while exports will be slower to pick up due to the severe recession in Europe. Investment will drop and stay low throughout 2021, particularly should a second lockdown be necessary (the double-hit scenario). Unemployment is projected to increase and remain elevated due to a slow recovery of labour‑intensive sectors. Public debt will soar but will stay low relative to other OECD countries.

The economy is projected to contract sharply as the COVID‑19 pandemic drags down both domestic and external demand. GDP growth is expected to shrink by 10.4% in 2020 in a scenario that assumes that a second virus outbreak occurs later in the year and by 8.1% in a single-hit scenario. GDP growth will rebound as confidence and world trade pick up, boosting consumption and investment. Unemployment will rise, but despite some gradual decline, it will remain above the pre-crisis level.

The COVID-19 pandemic has led to a sharp contraction of the economy. If the virus subsides by the summer (the single-hit scenario), GDP is projected to shrink by 6.5% in 2020, as a consequence of measures put in place to contain the spread of the COVID-19 pandemic, and then recover by 3.9% in 2021. If there is a new virus outbreak later this year (the double-hit scenario), GDP would drop by 7.7% in 2020 and rebound by only 0.2% in 2021. In both scenarios, the recovery will be supported by domestic demand and, to a lesser extent, by exports. The unemployment rate would reach a level close to 8.6% in 2021 in the double-hit scenario and 7.5% in the single-hit scenario.

The pandemic will push the economy into a severe recession in 2020, driven by the global contraction, the fall in tourism, lower oil prices and the necessary domestic confinement measures taken. GDP would fall by 8.6% this year if there is another outbreak later in the year (the double-hit scenario). If further outbreaks are avoided (the single-hit scenario), the economy would contract by 7.5%, with a recovery in the second half of the year led by exports and consumption. In both scenarios, the level of GDP would remain lower than at end-2019, as it will take some time for the tourism and export sectors to return to pre-pandemic levels. The poor and vulnerable, including informal workers, will be particularly hard hit by the recession.

The economy has been hard hit by the COVID-19 virus. Output is set to shrink by 8% in 2020 before picking up in 2021 if the current outbreak is overcome and restrictions are gradually lifted from mid‑May (the single‑hit scenario). If there is a second wave of the virus later in 2020, GDP is expected to decrease by 10% and the rebound will be considerably slower (the double-hit scenario). The fall is driven by domestic demand in both scenarios, including private consumption and investments. Pent‑up consumption demand will drive the initial pick-up, with investment lagging due to spare capacity and lingering uncertainty, but output will remain below pre-crisis levels by the end of 2021 in both scenarios. Unemployment will remain well above 2019 levels throughout 2021. Automatic stabilisers and discretionary spending are supporting businesses and households, pushing the fiscal balance into deficit.

The swift and decisive response against COVID-19 successfully contained the virus outbreak, saving lives and allowing the economy to reopen faster. However, confinement brought a number of sectors to a sudden stop in the second quarter. The economic recovery will be supported by substantial fiscal and monetary stimulus, but will remain sluggish, as high unemployment and weak business confidence hold back domestic demand and export growth is stymied by the collapse of international tourism. Assuming that there are no further virus outbreaks (the single-hit scenario), GDP is projected to shrink by nearly 9% in 2020 and only return to the pre-crisis level by the end of 2021. Should there be a second global wave of infections in the fourth quarter of 2020 (the double-hit scenario), GDP is projected to shrink by 10% in 2020 and to remain 3.5% below the pre-crisis level by the end of 2021.

Norway’s mainland GDP is projected to fall by 8.7% in 2020 if there is a new virus outbreak later in the year and associated shutdown (the double-hit scenario) and by 7% if this is avoided (the single-hit scenario). The recovery will be muted in both scenarios, and output will not reach pre-COVID-19 levels by the end of 2021. Similarly, unemployment will not have returned to pre-crisis levels. A sharp increase in the mainland’s fiscal deficit will imply a substantial drawdown from the wealth fund. Weak demand will push consumer price inflation down.

Strict confinement measures have taken a heavy toll on the economy. Assuming the current pandemic wanes progressively and further outbreaks are avoided (single-hit scenario), GDP is projected to contract by 7.4% in 2020, followed by a rebound of 4.8% in 2021. In the equally likely double‑hit scenario, a second outbreak later in the year and renewed containment measures will lead to significantly weaker growth outcomes: a 9.5% contraction in 2020 and a 2.4% recovery in 2021. The government has launched sizeable financial support for businesses, largely non-refundable, and taken other extensive policy measures, notably for self‑employed, temporary workers and small firms, which will help cushion employment losses and sustain household and business income. Yet, high unemployment will dent consumption growth, and lingering uncertainty is set to weigh on private investment, limiting the recovery and, especially in the double-hit scenario, rising risks of hysteresis effects.

The economy is projected to shrink by 11.3% in 2020, should a second pandemic outbreak hit at the end of 2020 (the double-hit scenario). Assuming a single wave of the pandemic (the single-hit scenario), GDP is expected to decline by 9.4% in 2020, with a rebound of 6.3% in 2021. In the double-hit scenario, the recovery will be slower due to prolonged export weaknesses, heightened uncertainty, additional bankruptcies, and prolonged unemployment spells. By the end of 2021, public debt (Maastricht definition) is expected to increase to 131% of GDP if the virus outbreak subsides by this summer and 138% of GDP if there is a second wave later this year.

GDP is projected to decrease by 8.6% in 2020, should a second virus outbreak take place by the end of 2020, while it would fall by 6.5% should a second wave of the pandemic be avoided. These negative shocks will have a long‑lasting impact on the economy in both scenarios, with GDP remaining below its pre‑crisis level at the end of 2021. The recovery will be slower in case of a second outbreak due to a more pronounced deterioration of the labour market and steeper losses in productive capacity.

The economy will be hit hard by the current crisis, even if the country has so far successfully managed to contain the pandemic. Plummeting world trade and massive disruption to global value chains will hurt the export‑dependent manufacturing sector. In case of a new outbreak later this year (the double‑hit scenario), GDP will fall by more than 11% in 2020. GDP will contract by 9.3% if the current outbreak subsides and another wave is avoided (the single‑hit scenario). The recovery will be hampered by heightened uncertainty and high unemployment.

Containment measures to prevent the spread of the COVID-19 virus have led to a domestic shock as large parts of the service sector closed while a negative international demand shock curtailed production in the manufacturing sector that is strongly integrated in international supply chains. In case of the virus outbreak returning later in the year (the double‑hit scenario), the second lockdown will have a lasting negative impact on businesses, leading to relatively large shares of underutilised resources at the end of the projection period. In the single-hit scenario, the initial deep shock is followed by a rebound of economic activity, leading to a sustained recovery that quickly reduces unemployment.

The COVID-19 outbreak adds to South Africa’s already severe economic challenges, with depressed growth, large fiscal deficits, increasing debt and high social vulnerabilities. Strict containment measures have cut production in key sectors and led to a slump in demand. In the double-hit scenario, a new virus outbreak affecting South Africa and its trading partner countries will curtail exports, deepening the reduction in GDP to 8.2% in 2020 and limiting the recovery in 2021, with GDP growth at 0.6%. Persistent electricity shortages, rising government debt and policy uncertainty will continue to hold back investment and production. In the single-hit scenario, economic activity will fall by 7½per cent in 2020 before picking up progressively with GDP growth of 2½per cent in 2021.

The economy is projected to contract by 14.4% in 2020 in a scenario with a second virus outbreak later in the year, and by 11.1% in a scenario assuming that the pandemic subsides by the summer. The subsequent recovery in 2021 will be slower in the former case, at 5%, compared to the rebound of 7.5% in the single-hit scenario, given more persistent effects on labour markets and the financial situation of firms and households. In both scenarios, the fall in domestic demand, due to job destruction and the shutdown of activity, is the key driver of the contraction. The drop in external demand, especially in tourism services, will also weigh very strongly on the economy in 2020.

The COVID‑19 pandemic has triggered a severe recession. GDP is expected to fall by 7.8% in 2020 assuming another virus outbreak later in the year and by 6.7% if the virus outbreak subsides by summer. While containment measures have been less stringent than in most other OECD countries, private consumption has fallen markedly and is set to recover only slowly. Both disruptions to supply chains and tumbling demand have led to stoppages in industry. Export weakness is expected to linger, and the investment slump even more so, as high uncertainty compounds the effect of weak demand.

The COVID-19 pandemic has triggered a large decline in output. Despite a shorter shutdown than in many countries, private consumption and investment have slumped. GDP is expected to fall by 10% in 2020 if there is another virus outbreak later in the year and by 7.7% if the pandemic outbreak subsides by the summer. In the double-hit scenario, domestic demand will rebound only slowly due to low confidence. Private consumption will also be affected by higher unemployment. In the single-hit scenario, domestic demand should rebound more rapidly. In both scenarios, exports will recover only slowly, as foreign demand will remain weak, while unemployment will increase as the use of short‑time work schemes declines.

After positive growth in the beginning of the year, Turkey’s output is projected to contract by nearly 5% to 8% in 2020, depending on whether a new virus outbreak later this year is avoided (the single-hit scenario) or not (the double-hit scenario), due to employment losses, sharp income shortfalls and a fall in external demand. As a result of the relatively modest social safety net and firms’ debt burdens, the recovery after the waiving of the containment measures is expected to be gradual. In the double‑hit scenario, renewed lockdown measures would lead to a sharper investment and output decline in 2020 and a more gradual recovery in 2021.

The COVID-19 crisis has led to a severe economic contraction. GDP is projected to fall by 14% in 2020 if there is a second virus outbreak later in the year (the double-hit scenario). An equally likely single-hit scenario would still see GDP fall sharply by 11.5%. In the double-hit scenario, the unemployment rate is set to more than double to 10% and remain elevated throughout 2021, despite widespread use of furloughing. Measures to limit the effects of the crisis in that scenario would push the fiscal deficit up to at least 14% of GDP in 2020.

The COVID-19 outbreak has brought the longest economic expansion on record to a juddering halt. GDP contracted by 5% in the first quarter at an annualised rate, and the unemployment rate has risen precipitously. If there is another virus outbreak later in the year, GDP is expected to fall by over 8% in 2020 (the double-hit scenario). If, on the other hand, the virus outbreak subsides by the summer and further lockdowns are avoided (the single-hit scenario), the impact on annual growth is estimated to be a percentage point less. The unemployment rate will remain elevated after states lift their shelter‑in‑place orders, reflecting ongoing difficulties in sectors such as hospitality and transportation, and the sheer scale of job losses. With unemployment remaining high, inflation is projected to stay low, although less so if subsequent lockdowns are avoided.

The COVID-19 crisis is hitting the economy hard, with adverse consequences on activity, jobs and incomes. Lower revenues from tourism and worker remittances and collapsing export demand are adding to the impact of strict containment measures on domestic demand and activity. The large fiscal package aimed at protecting people and jobs, coupled with emergency funding from multilateral institutions, the formation of a new government which reduces political uncertainty, the fall in oil prices and the start of the Nawara gas field all support growth and reduce social costs. In the double-hit scenario, which assumes a second virus outbreak later in the year, GDP is projected to fall by 8.2% in 2020. In the more benign single-hit scenario, where a renewed outbreak is avoided, GDP would fall by 6%.