A deep euro area recession in H1 now seems inevitable, GDP is set to contract in Q1 before collapsing further in Q2, analysts at MUFG Bank report.
“We currently assume that the number of new cases in Europe will peak by late-April, but containment measures will be gradually eased with some restrictions remaining in place for most of Q2. Based on this, we have revised our euro area GDP forecast for 2020 down to -6%.”
“The euro area economy is unlikely to emerge from such a sharp fall in output unscathed. Relative to a pre-virus baseline, we see a loss of output of 2% of GDP by 2023.”