UOB Group’s Economist Lee Sue Ann reviews the latest revision of the Q4 GDP figures in Euroland.
Key Quotes
“The Eurozone’s GDP fell by 0.6% q/q in 4Q20, less than the 0.7% q/q contraction of the first estimate. This contraction follows a strong rebound of 12.4% q/q in 3Q20, when COVID19 pandemic restrictions were eased. In the second quarter of the year, the Eurozone economy had suffered a historic contraction of 11.7% q/q. Compared with the same quarter of the previous year, GDP, however, decreased by 5.0% y/y. This compares with a 5.1% y/y drop expected. For 2020, the Eurozone economy shrank by 6.8%.”
“The European Commission, last week, cut its Euro Area economic outlook for this year to 3.8% from 4.2%, and said developments largely depend on the success of the region’s immunization efforts.”
“Indeed, the success and distribution of vaccines, and how the COVID-19 pandemic evolves will drive both upside and downside risks to our Eurozone growth outlook of 5.2% in 2021. If infections were to increase further, requiring more stringent containment measures, then confidence would remain weak for a longer period and increase precautionary savings, thereby negatively affecting consumption and investment.”
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