Christine Lagarde said the economic recovery after the crisis will be “restrained” because households have decided to save instead of spend. She added that airlines and hotels across the European Union’s 19-country single currency bloc will suffer “irredeemable” damage. Speaking at an online business summit, Mrs Lagarde said: “The recovery is going to be a complicated matter, I would characterise it as sequential and restrained.
“The amount of household savings we have seen in the euro area – these savings were partly forced and they will go back up now that shops are open, but there is also some precautionary savings.”
In a dire warning for the hospitality and travel sectors, she added: “We are not going to return to the ex-ante status quo.
“We will not travel as much, so the airline industries, the hospitality industries, the entertainment industries are going to come out of this recovery process in a different shape and some will probably be hurt irredeemably.”