In the short term, the main uncertainty is how fast India recovers from the pandemic.

The corona pandemic has seriously weakened the euro area economy and the outlook remains uncertain. Recovery will be affected by e.g. how successful the balance between the virus and the economy turns out to be, and how quickly confidence improves.

According to the Bank of Finland’s assessment, Finnish GDP will contract by 4.7% in 2020. Even though the recession appears to be shallower than feared in the spring, it is still deep, and recovery will be slow.

Monetary accommodation has opened up space for other economic policies in the euro area, which needs to be put to good use by pursuing economic reforms. Productivity and employment growth ultimately rest on our ability to reform.

In recent years central banks have eased monetary policy by conducting large-scale asset purchases and offering banks credit on affordable terms. These measures promote price stability and facilitate economic growth and employment.