The economic shock of COVID-19 differs in nature from other shocks, such as those brought about by natural disasters or a financial crisis in which the financial intermediation function becomes impaired.2 The latest shock is unique in that it combines aspects of both a supply shock, with sluggishness in production and trade, and a demand shock, with a sharp decline in services consumption.
2 While we cannot be certain that these losses were due solely to the financial crisis, losses of this magnitude appear broadly in line with estimates of the effects of prior financial crises.