Economists are cutting growth forecasts for the eurozone economy as a third wave of Covid-19 infections and vaccination delays spur tighter restrictions in several countries including France, Italy, and Germany. The reintroduction of lockdown measures across Europe is fuelling concerns that the region could suffer another disappointing summer tourism season if vaccinations do not speed up enough to allow travel restrictions to be eased.
France imposed a new four-week lockdown in Paris and several other regions on Friday night after coronavirus infection levels rose to their highest level since November. Italy has announced a fresh lockdown over Easter, while some German cities have been forced to roll back lifting of restrictions that had only recently been eased due to a sharp rise in infections. This has prompted private sector economists, including those at Goldman
Sachs, Barclays, ING, and Berenberg, to cut their forecasts for eurozone growth — in contrast to the brightening outlook for the US and much of the global economy. “Up to now, we had built our eurozone forecasts on the assumptions of gradual easing of the lockdown measures in March,” said Carsten Brzeski, head of macro research at ING. “Well, we can forget about this.” 1–1e said ING now expected the eurozone economy to shrink 1.5 percent in the first quarter, having previously forecast a 0.8 percent decline.
Return to pre-Covid output levels not expected before 2022 Holger Schmieding, chief economist at Berenberg, said each month in lockdown would shave 0.3 percentage points off eurozone growth. He has cut his growth forecast for this year from 4-4 to 4.1 percent, assuming a one-month delay to reopening.