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Virus disruption will cause some long-lasting damage

The economy is heading for a record drop in GDP of 35% annualised in the second quarter. As firms and households are suffering permanent hits to their income, that slump will only be partially reversed in the second half of the year once the restrictions on activity are lifted. We expect a 5.3% drop in GDP for 2020 as a whole. We forecast GDP to rise strongly in 2021 and 2022, by 4.8% and 3.0% respectively, but that will not be enough to get the economy back to its pre-2020 trend.

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