Eurozone: GDP expected to contract around 8% this year – UOB

Economist at UOB Group Lee Sue Ann gives her prospects for the economic activity in the euro area for the current year.

Key Quotes

“… 2Q20 GDP in the Eurozone was confirmed to have fallen by 12.1% q/q, following earlier estimates released on 31 July. This marks a record fall in Eurozone GDP in the second quarter, the deepest since the time series started in 1995… The record-fall in GDP coincided with COVID-19 lockdowns, where many countries in the region began to ease only from May.”

“Much depends, however, on the evolving COVID-19 situation in Europe given that increasing numbers are contending with a resurgence of infections. But taking into account these recent data releases, we now expect the Eurozone economy to contract by 8.0% in 2020, compared to a contraction of 7.4% previously penciled in our 3Q quarterly update. This is largely on the back of a revision in 2Q20 GDP to -14.9% y/y, compared to -12.6% y/y previously. 3Q20 and 4Q20 GDP forecasts remain at -8.3% y/y and -5.7% y/y, respectively.”