CPB: Corona crisis scenarios: recession unavoidable, increase in government debt bearable

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Press release

CPB Netherlands Bureau for Economic Policy Analysis uses four scenarios to outline the possible economic impact of the coronavirus in 2020 and 2021. The scenarios use different starting points with respect to the duration of the physical contact restrictions and the severity of the economic impact. All scenarios result in recession, with GDP declining by between 1.2% and 7.7% in 2020. In our mildest scenario, the economy will rebound as early as in the third quarter of 2020, whereas in our gravest scenario, problems will expand to also include the financial sector and the situation abroad will continue to worsen. This last scenario also projects GDP to decrease by 2.7% in 2021. Under three of the four scenarios, the economic downturn will be more severe than in the 2008–2009 crisis.

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