Macro: COVID-19 Economic update euro area_18_03_2020

Since the beginning of the year, and even more so in recent weeks and days, the news situation and with it the economic outlook has been developing at a rapid pace. Enclosed is a brief overview:

1)At the beginning of the year there were still signs that the economic weakness wasbottoming out - according to leading indicators the recessionary industrial sector seemed to haveturned the corner.
2)In January / February the corona virus spread in China. Certain transmission effects on theEuropean economy were to be assumed and it became probable that the expected upswing wouldbe delayed.
3)In February / March, the first Covid-19 diseases also occurred in Europe. It was still hopedfor a limited spread in Europe, which from an economic point of view at that time was only to beaccompanied by a noticeable economic slowdown.
4)In order to control the now foreseeable corona pandemic with a main focus on Europe,far-reaching economic restrictions are currently being imposed across Europe and in all majoreconomies of the euro area, with a high risk of even more far-reaching measures to beimplemented. For individual sectors of the economy, the situation is coming to a standstill and arecession in the euro area is becoming inevitable.

This Research was produced and first published by Raiffeisen Bank International AG which is supervised by the Austrian Financial Market Authority and the National Bank of Austria.