Eurozone Economy to Take Two or More Years to Recovery to Pre-pandemic Levels of Growth

Eurozone Economy to Take Two or More Years to Recover to Pre-pandemic Levels of Growth

Posted Thursday, August 20, 2020 by
Arslan Butt • 1 min read

A recent Reuters poll reveals that the Eurozone economy could take more than two years to recover from the worst ever recession caused by the ongoing coronavirus crisis. Economists polled also highlighted the risk that the recovery seen in employment figures seen currently could turn back around and head lower towards the end of this year.

After going into severe lockdowns to contain the spread of the pandemic, several European countries have started reopening and resuming normal levels of activity, helping drive an improvement in economic data recently. In addition, the trillions of euros’ worth of stimulus measures announced by the ECB as well as the EU recovery fund worth 750 billion euros are expected to support economic recovery in the Eurozone region.

According to economists, the Eurozone economy could grow by 8.1% in Q3 2020 after having contracted severely by 12.1% in the previous quarter. In Q4, however, the GDP could slow down to 3%.

Over 70% of respondents felt that the Eurozone could take two or more years to return to pre-pandemic levels of economic growth. Even as economies reopen, downside risks still plague recovery, especially as the pandemic can truly be brought under control only after the release of an effective vaccine, work on which still remains underway.

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