More aggressive containment measures to hit growth

The direct economic impact of President Donald Trump’s European travel ban will be limited, but we now anticipate more aggressive measures to contain the pandemic over the next few days – with nationwide school closures, bans on large public gatherings and localised lockdowns all possible. As a result, we now expect GDP to fall by 4% annualised in the second quarter and to stagnate in the third. If such measures helped to stem the spread of the virus, however, they may reduce the risk of a worse-case scenario, in which one-third of the population become infected resulting in a prolonged recession.