The Eurozone Economy Is Slowing Again
Skerdian Meta • 1 min read
The rebound in the Eurozone economy after the lockdown was decent, but not as strong as in the US. However, it didn’t last long, and now the Eurozone economy has slowed again, and it will probably head into another recession as the economy gets shut down again this winter. Retail sales already turned negative in September. Below are the forecasts from the ECB and the retail sales report.
The European Commission Forecasts – November 5, 2020
- Eurozone 2020 GDP forecast -7.8% (previously -8.7%)
- Eurozone 2021 GDP forecast +4.2% (previously +6.1%)
- Eurozone 2022 GDP forecast +3.0
- Expects Eurozone economy to contract by 0.1% q/q in Q4
- Eurozone inflation 0.3% in 2020
- Eurozone inflation 1.1% in 2021
- Eurozone inflation 1.3% in 2022
The commission adds that the technical assumption for the forecasts is that there will be no trade deal between the EU and the UK once the Brexit transition period ends on 31 December. They add that the forecasts are surrounded by ‘exceptional uncertainty’.
September Eurozone Retail Sales Report from Eurostat – November 5, 2020
- September retail sales -2.0% vs -1.5% m/m expected
- Prior +4.4%; revised to +4.2%
- Retail sales +2.2% vs +2.8% y/y expected
- Prior +3.7%; revised to +4.4%
Euro area retail sales activity slumped towards the end of Q3, as purchases in all categories fell after a sharp surge in online clothing sales in August. The decline in September pretty much reversed the August trend, with online clothing sales leading the drop.