Despite the depth of the GDP decline in the second quarter of 2020, the CESEE region still reported more benign real GDP decline figures than the euro area (–7.3% compared to –11.8%, quarter on quarter). The summer months allowed for a breather; however, the swift economic recovery is likely to be short-lived.
This is, at least, indicated by the most recent readings of activity as well as sentiment indicators. Against the background of rapidly rising infection numbers, improvements in these indicators have stalled in the past few weeks (Schreiner et al., 2020). Economic policy has come to the rescue The CESEE countries deployed rather large fiscal packages, including i.a.