Experts are warning that the Eurozone is facing a double dip recession as lockdowns are being extended amid the pandemic.
With the Covid measures being imposed across the Eurozone, this could plunge the EUs single currencies bloc into a double dip recessions.
Consumer confidence has taken a hit during the first weeks of 2021, and there has been a severe economic downturn as many businesses have been forced to close amid the lockdowns.
Senior Eurozone economist Bert Colijn, of ING warned that data suggests that “activity continues to trend lower,” as the new wave is “dragging on for longer.
Colijn said that there is a steady decline in activity,” but warned there is a “risk of a delayed wave of bankruptcies if generous government and central bank support measures do not stay in place.”
Eurozone forecast output has been predicted to slump between 1.8% and 2.3% from October to December of this year, according to Oxford Economics and Nomura.
Katharina Utermohl, a senior European economist at Allianz, told the FT, “We expect the Eurozone economy to kick off 2021 with a double-dip recession, with a second consecutive quarterly GDP contraction, in the first quarter, all but certain following the prolongation and further tightening of Covid-19 restrictions in these weeks.”
Economist Chiara Zangarelli, of Nomura said the first quarter of the Eurozone’s GDP for 2021 looks dark, but the vaccine roll out looks “encouraging.”