Interim forecast

The spread of the coronavirus epidemic and the emergency health protection measures are strongly affecting economic activity, which is set to shrink significantly this year. The depth of the GDP decline and the dynamics of the recovery after the end of the crisis situation are and will be crucially dependent on the extent and duration of the coronavirus spread and the time of the introduction and the scope and content of economic policy measures. The COVID-19 scenario drawn up by the Institute of Macroeconomic Analysis and Development for the needs of medium-term budgetary planning predicts an approximately 8% decline in GDP in 2020, taking into account economic policy measures for alleviating the consequences of the epidemic and assuming a gradual recovery of the economy, which should start in June. As the spread of the coronavirus epidemic and its containment are a great unknown at this time, uncertainty remains and there is a risk that the period of severely paralysed economic activity will last longer than assumed and that the decline in GDP will be larger and more permanent. In the event of an extension or tightening of the strict containment measures, which are significantly hampering economic activity, the negative impacts will be more profound and far-reaching. In this case, GDP could fall by as much as 15% (or more) this year.