The economy of the UK Crown Dependency Jersey in the Channel Islands is likely to suffer long-term scarring due to the effects of the COVID-19 pandemic according to a government-commissioned report.
The Fiscal Policy Panel said while Jersey has set out a clear roadmap for the lifting of Covid-19 restrictions, it is likely that the pandemic will have a long-term impact on economy.
It said “this means that there is a risk Jersey will not recover to the level of economic output expected before the pandemic in the years covered by the Government Plan."
The report says that finance, the Jersey's largest sector, has generally coped well with the pandemic, except for the banking sector where profits have been hit by reduced interest rates, creating a ‘sharper-than-expected fall in profits.
It projects a downgrading of the Jersey economy by around 10 per cent, the largest decline since 1998 but notes that “there still remains considerable uncertainty around the size of the downturn, which will not become clear until much later this year.”
The Fiscal Policy Panel (FPP) concluded that “at this point the panel continues to advise that Jersey’s economy is likely to remain smaller in the long run than was forecast ahead of the pandemic.”