According to the latest Reuters poll of economists, the coronavirus resurgence is seen derailing the Eurozone’s economic recovery, with weak growth and inflation outlooks.
Key findings
“The Oct. 15-22 Reuters poll found nearly 90% of economists or 48 of 55, said there was a high or very high risk the resurgence in cases now underway across Europe would halt that nascent euro zone recovery.”
“After contracting 11.8% in Q2, the economy was expected to have grown 8.9% in Q3, better than 8.1% predicted last month, and by far the strongest performance on record if realized. But growth in the current quarter will slip to 2.1%, lower than the 2.5% previously expected and substantially weaker than the 2.8% forecast in May when lockdowns were eased after the first wave of infections.”
“Over 60% of respondents, or 31 of 53, said the bloc’s jobless rate would not peak for at least six months. Only two said it already had. But the range of forecasts was wide, from 8.1% to 13.4%. Only a handful of economists predicted inflation would touch the European Central Bank’s target of just below 2% before end-2022.”
“The ECB is forecast to increase the size of its pandemic-related bond purchases by an additional 400 billion euros on top of the 1.35 trillion euros already announced.”
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