Notes: The chart shows the response of real GDP growth to a tightening in financial conditions (one standard deviation) measured through a financial conditions index. The right panel shows the impact across quantiles of the GDP distribution.
Economic and financial challenges While the recent news on vaccines is very welcome and reduces the likelihood of the most severe scenarios, the current surge in infections and the re-imposition of containment measures serve as warning signals that the recovery path will still be long and fraught with risks.