A perceptible shift in the growth strategy of some EDEs in favour of increase in domestic consumption and demand, entailed significant rise in wage levels which is adding to inflationary tendencies. The scope for policy maneuverability in the EDEs at present seems to be limited as compared to 2008–09.
Broad economic activity should pick up strongly in the second half of this year thanks to vaccinations, the easing of confinement measures and monetary and fiscal policy support in both the euro area and the rest of the world.