Nominal GDP is the cash value of the goods and services produced in a year. The growth rate is the percentage change in nominal GDP from one year to the next. Each extra month of lockdown is assumed to reduce growth between 2019-20 and 2020-21 by one percentage point.
As the lockdown gets longer, the initial drop in GDP gets larger. Unless growth in 2021-22 increases to make up for this, the effect is a permanent fall in the level of nominal GDP compared with its pre-crisis trajectory. Lower growth after the crisis could occur if ‘scarring effects’ permanently damage the economy.
Public sector borrowing (the deficit) is the difference between public sector spending and tax income. As spending is assumed to stay close to its pre-crisis trajectory but taxation is affected by GDP, borrowing increases when GDP falls and decreases when GDP rises.
Public debt is the total amount of debt accumulated as the result of borrowing. In addition to the effect of public borrowing, loans made by the Bank of England can also affect the public debt because the Bank of England is a public sector institution.