Dr. Eddie Casey:

The Deputy asked a good question in relating this to what we saw last time. When we looked at this in our projections we assumed it would be stronger again because the savings are unwinding, there is less uncertainty and there is the sense that we are out of the crisis. When things start to reopen they will open up on a more sustained basis. Those kinds of factors lead us to believe the very strong recovery and consumption we saw in previous reopenings of the economy will potentially be even stronger again. In some ways, we are at that point already. Credit card data, ATM withdrawals and retail sales data from the CSO all indicate that there is already a recovery in consumer spending, even with the lockdown still in effect to a large degree. This gives us some confidence that there will be a strong recovery.

To put one estimate on it, which Mr. Barnes alluded to, if the recovery is highly domestic and we spend a large part of the money that has accumulated over the past year on domestic services, it could potentially lead to much higher growth. One estimate we made in the report looks at the Department's projections, which assume a very high rate of imports for everything being spent. If we change that forecast so that it is more in line with historical imports for everything we spend, growth will be potentially 6% higher. These are drastic differences potentially. While there is major uncertainty, this adds to our more optimistic picture of where the recovery will lead.