The economic fallout from the pandemic is severe. The lockdown measures imposed by governments led to a sharp decline in gross domestic product (GDP), causing the euro area economy to contract by 11.8% in the second quarter (Figure 3).
While a strong recovery is expected in the third quarter, the most recent ECB staff projections estimate euro area GDP at end-2022 to be around 3% below the growth path that had been forecast as recently as March. [2] It may therefore take years to completely overcome the economic damage caused by the crisis. Figure 3 Real Gross Domestic Product (GDP): euro area.