Economy

Can we still get rid of the loss of prosperity due to corona?

The previous crisis is an important warning in this respect. In the period before 2008, the average growth was 2.1 percent, but after the crisis of 2008 our economy switched back to a structurally lower growth path of 1.4 percent per year.

If we had a similar impact after the corona crisis, our growth would slow to 0.7 percent per year. In that case, we will never regain our prosperity in the pre-crisis process and corona saddles us with a structurally increasing loss of prosperity. By 2030, that welfare loss would increase to 11 percent, or 50 billion in today’s euros. Our economic growth will probably not go as fast as after 2008, but the first indications are not really reassuring.

According to our surveys of companies, investment plans have been reduced by a quarter in 2020. And no improvement is expected for 2021. Participation in training is also under pressure, while the consequences of the crisis also appear to be negative for education. Finally, this crisis also threatens to put fundamentally healthy companies in trouble.

These kinds of developments point to the serious risk that this crisis will cause structural damage to our growth potential, resulting in a permanently lower level of prosperity, lower purchasing power and more difficult financing of our welfare state in the longer term.

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