The US experienced its biggest post-war economic contraction, with a year-on-year decline of 9.1 per cent for the quarter. b. In the Euro area, the numbers were even worse with a year-on-year economic contraction of 14.7 per cent. 8. The damage caused by such output contractions will have serious consequences on economic structures, especially on potential output and labour productivity. 9.
8 International Monetary Fund. 2014. Assessing reserve adequacy – specific proposals. 6 7  Page 10 of 11  While higher levels of reserves may create the perception of resilience, simply having reserves on their own is not an effective buffer against speculative attacks or crises. Reserves do not eliminate vulnerabilities. They are not a substitute for sound policies and strong, well-regulated financial sectors.