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The economic development of this year and the next is in the hands of health policy, said yesterday the head of Wifo, Christoph Badelt, in the presentation of the forecast for 2021 and 2020 (see graph).
For health policy, that means testing and vaccination, Badelt said. That could not “be so expensive that it would not be cheaper than prolonging the economic crisis,” Badelt said.
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Because it is currently out of the economy how the economy will develop in the coming months, this time Wifo has also calculated two forecast scenarios that see real economic growth of 2.3 percent or 1.5 percent for this year, depending on whether. there are openings there or, for example, four weeks of closure starting in April. The difference between the two scenarios corresponds to a difference in GDP of three billion euros for the whole year, which is “an adult male elephant” and “not just a baby elephant”.
Michael Reiter, the head of the IHS forecast, said an additional four-week lockdown in the spring would also lower expectations for this year’s GDP growth, from the currently estimated 2.6 percent to 2.0 percent.
Because each additional week of lockdown would have an impact of 400 to 800 million euros or 0.1 to 0.2 percent on GDP. “The elephant continues to grow every week, depending on how well we feed it,” the economist told a joint online news conference.
“Special topic of the labor market”
Badelt described the situation in the labor market as a “special issue”. Even in the scenario of a rapid recovery, the labor market will continue to be affected by the pandemic for longer. That is why a complete package is needed. Starting with prevention, that is, education and training, up to the “one-ideological discussion” on employment programs.
