Economists polled by Reuters indicate that the Eurozone economy is headed for a double-dip recession in the wake of the latest wave of the coronavirus pandemic that has forced governments to reimpose lockdowns and restrictions. According to the latest poll, the Eurozone economy is now expected to contract by 0.8% in Q1 2021, against the previous month’s forecast for a growth of 0.6% instead.

The Eurozone GDP had shown a contraction for the first two quarters of 2020, and then again during Q4 2020. With the latest estimate for a contraction in Q1 2021, the economy seems to be set to experience a double-dip recession.

On a more worrying note, more than 75% of the economists indicated that the Eurozone economy’s outlook faced more downside risks due to the extension of lockdowns. In addition, the delay in vaccine rollout across the EU and the discovery of more contagious strains of the coronavirus paint a gloomier picture for one of the most developed economies of the world.

Economists have forecast a growth of 2.1% during Q2 2021, slightly lower than previous month’s estimate of a 2.3% growth. Following a contraction by 6.8% during 2020, the Eurozone economy is expected to post a growth of 4.3% in 2021 and 4% in 2022, with this year’s growth projections revised lower from the previous forecast of 4.5% growth.