But we also collect and analyze enormous amounts of other information, both in the form of data and reports from members of the communities we serve, to help us assess the state of the economy and inform our decision-making. The Economic Outlook I’ll start off with the most common measure of the overall economy: gross domestic product, or GDP. I expect inflation-adjusted, or real, GDP to rebound sharply this year. Indeed, with strong 1/4  BIS central bankers' speeches  federal fiscal support and continued progress on vaccination, GDP growth this year could be the strongest we’ve seen in decades. Such a robust rebound would be very welcome after the toughest period for the economy in living memory and a winter where the pandemic has been particularly severe. The resurgence of COVID-19 over the past few months caused consumers to pull back on spending, resulting in significant job losses in some sectors—especially in leisure and hospitality. In past recessions, we have typically seen a decline in manufacturing jobs, while the service sector—establishments like hotels, bars, and restaurants—was not affected to the same extent. But the pandemic has flipped the script in that regard. Indeed, this time, both the manufacturing and housing sectors have rebounded sharply since last spring, while much of the service sector remains depressed. The pandemic has had a truly devastating effect on employment.
In general terms, the CCyB would be activated and increased by authorities whenever aggregate credit growth was judged to be excessive and associated with a build-up of system-wide risk. The buffer can be reduced during a downturn to help ensure that banks maintain the flow of credit in the economy. Considering that this is a new macroprudential tool, the evidence of implementations is still limited. Notwithstanding that, the number of countries that have developed a policy framework is increasing and the number of jurisdictions that have set a positive buffer level increased significantly over recent years. Until now, around forty countries have been using the CCyB, with heterogeneous effects depending on their local conditions and vulnerabilities. Furthermore, during the Covid-19 crisis, many countries released their countercyclical capital buffers, marking the first time that the CCyB was used widely in a downturn. Among them we can mention France, Germany, Sweden, Switzerland and United Kingdom (BIS, October 2022). These countries lowered the CCyB either completely or partially. Recent reports from the Basel Committee are also focused on providing empirical evidence regarding buffer usability and cyclicality of the framework. So far, the evidence gathered suggests that although the countercyclical capital buffer may be less effective to contain the build- up phase of the credit cycle. However, it may help to strengthen  1/3  BIS - Central bankers' speeches  banks' solvency and mitigate the risk that banks' lending standards amplify an economic downturn as well as all the spillovers implied.