The Treasury Economic Scenarios
Treasury has done some high level forecasts for what may happen to key indicators under different scenarios. They scenarios broadly are:
- Level 4 for 1 month and Level 3 for 1 month
- Level 4 for 3 months
- Level 4 for 6 months and Level 3 for 6 months
- Level 4 for 3 months and Level 3 for 3 months
- Same as Scenario 1 but lower global growth
They key indicators are:
Scenario | Peak Unemployment | CPI in 2021 | 5 yr GDP loss |
1 | 13.5% | 0.25% | $124b |
2 | 17.5% | 0.25% | $155b |
3 | 17.5% | -0.75% | $270b |
4 | 17.5% | -0.75% | $224b |
5 | 13.5% | -0.25% | $214b |
They also say that the Government spending an extra $20 billion in Scenario 1 means unemployment would only peak at 8.5% and drop back to 5.5% in 2021. That seems heroically optimistic.