Macro Bite: Economic Performance Since the Pandemic

This time, the productivity bite is not about productivity in a narrow sense, but more generally about the growth of gross domestic product since the pandemic.

I think it’s once again time to take a closer look at economic developments since the beginning of the pandemic. Which countries have recovered quickly in terms of gross domestic product (GDP) growth? Which are in crisis?

The development since the fourth quarter of 2019 – that is, the last quarter before the outbreak of the pandemic – shows interesting differences between countries, amounting to almost 15 percentage points. While the economic output of the USA is almost 15 percent higher, Germany remained at the same level as 2019 after years of stagnation (Figure 1). Switzerland has developed quite favorably – its GDP is more than ten percent above the 2019 level. What’s interesting is that Switzerland, as so often, weathers major crises relatively unscathed. The downturn in 2020 was comparatively minor and the subsequent recovery proceeded swiftly. Austria, similar to Germany, is going through a phase of economic weakness. The Eurozone has experienced only moderate growth on average.

Figure 1

When comparing Switzerland’s development with the three large Eurozone countries (besides Germany, these are France and Italy), one can see a significantly better economic recovery in Switzerland (Figure 2). The comparison with these three large European neighboring countries shapes ourview of Europe. Germany, France, and Italy are all economically struggling, primarily due to their own past failures. At least Italy has apparently managed to free itself somewhat from its twenty-year stagnation phase and has grown roughly at the Eurozone average. In addition to funds from the EU, their own reforms have also contributed to this.

Figure 2

When comparing Switzerland with other important European countries, one can also see a somewhat more favorable development in Switzerland (Figure 3). Only the Polish economy, which continues to experience an economic miracle, has grown more dynamically. But Switzerland’s lead is small. So if one doesn’t only look at our three large EU neighboring countries, the economic development in Europe is only moderate, but not as bad as one often thinks.

Figure 3