In early January 2020, the globe found itself in front of an unprecedented health crisis. The major difference of covid-19 compared with previous viruses of SARs and MERS was that it necessitated WHO to announce a “pandemic”.
The high uncertainty of the downward economic growth path of a pandemic makes economic forecasting more risky. As it is reasonable to assume, a pandemic implies a far larger hardship that has several consequences on various aspects of human life and consequently on economic activity.
This working paper develops a simple consensus forecasting tool by using the IMF and the European Commission’s projections made during the Covid-19 crisis. It analyses the effects of the Covid-19 pandemic on six Euro Area (EA) economies by examining 2020 and 2021 forecasts of the GDP and the unemployment rate. It reveals that mainly the southern Euro area economies will experience the heaviest burden, in both human lives and economic cost, making sustainable recovery more challenging.
The above findings reveal that Cyprus has managed to maintain a moderate profile in economic and epidemiological terms under the pandemic, which enabled the country to experience the least possible adverse economic effects.