National Bank – 40 billion euros loss of performance due to Corona

In the twelve months since the first corona lockdown came into force, gross domestic product (GDP) was an average of 8.5 percent below the previous year’s value – the strongest and most abrupt economic slump in post-war history in Austria. The Austrian National Bank (OeNB) calculated today that the losses in value added during this period add up to around 40 billion euros.

“Taking into account a trend growth of one and a quarter percent, the GDP losses add up to around 40 billion euros. This means that the total value added was 40 billion below the value that would have been expected if the crisis had not occurred,” said the OeNB. She expects a significant economic recovery as soon as a “sufficient vaccination coverage” is achieved. However, the consequences of the Covid pandemic will be felt for even longer on the labor market and in the tourism sector.

During the first lockdown in spring 2020, economic output collapsed by almost a quarter. Industrial production and goods exports were particularly affected. Then came a significant recovery until the end of summer 2020. In October, GDP was only two and a half percent below the previous year’s figure.

Massive break-ins

“With the second wave of infections and the second and third hard lockdown, however, there was another massive economic slump. In contrast to the first lockdown, the economic sectors were affected very differently this time and economic output only collapsed half as much as in spring 2020,” said the National Bank on Thursday in a broadcast. There was only a massive drop in demand in those areas that were directly affected by health policy measures (and in many cases still are). The export-oriented industry, on the other hand, was robust. “Industrial production in Austria reached its pre-crisis level again in the 4th quarter of 2020 and survey results indicate a further recovery in the coming weeks”, the OeNB gives hope.

The results of the OeNB GDP indicator would also clearly show that the termination of lockdown measures in the service sector had led to a very rapid and significant recovery in business activity. “This pattern was particularly pronounced in retail, where catch-up effects typically provided additional impetus,” said the OeNB.

After one year of Covid-19, economic output in calendar weeks 9 and 10 (March 1–14, 2021) was 5.4 percent and 7.2 percent below the respective previous year’s value, with the value for calendar week 10 due to the “hamster purchases “before the first lockdown in the spring of 2020 was biased downwards by around 2 percentage points.

Savings volume increases

Regarding the outlook, the OeNB said: “Assuming that the lockdown measures expire in summer 2021, there should be a strong economic recovery in Austria. Unemployment can be expected to remain high. Nevertheless, it is over From today’s perspective, we can assume that the recovery will be much stronger and more dynamic than after past crises. “

However, this presupposes that private households spend part of the unintentionally accumulated savings and that government measures largely prevent bankruptcies of healthy companies. (apa)