Economic Buzz: Covid-19 Caused Significant Disruptions To European Labour Market

31 Mar 2022 , 02:55 PM

The IMF stated in a latest update that COVID-19 caused the most severe shock to the European economy for at least 75 years, with significant disruptions to the labor market. Nonetheless, a powerful policy response cushioned the pandemics impact and prevented unemployment from spiking as sharply as was initially feared. With the region now facing a second shock from spillovers caused by Russias invasion of Ukraine, authorities should proceed cautiously as they continue to scale back policy responses, so as not to undo their success in protecting jobs from the pandemic. Pre-pandemic estimates suggested that about 5 million jobs would be created over the next 10 years in the four largest countries of the euro area. The pandemic has cut that projection by up to 1.5 million, with those losing out mostly in low-skilled sectors.

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