The cold winter, the brightest spring and the political danger of debt

The situation in the economies is serious. However, analyzes show that the blow from the second wave of lockdows will not be as strong as it was in March. A smaller blow is expected but in the medium term forecasts the eurozone will shrink by 2.3% in the 4th quarter and only increase by 0.5% in the first quarter. Uncertainty around the forecasts is great but in the long run there is hope. According to Goldman Sachs economists, activity is initially expected to recover sharply after the reduction of lockdowns and when the pandemic will be managed with a vaccine in the second half of 2021. Second, strong global growth is expected, while the friendliest US trade policy will Thirdly, political support, including additional measures to support and stimulate growth, will continue. So it is predicted that growth will come from the second quarter of 2021 throughout Europe. According to analysts, the activity is expected to recover sharply as soon as the containment measures are reduced. It is estimated that there will be a steady easing of restrictions from February, which are expected to lead to a sharp recovery of 3.2% in euro area activity in the second quarter. The vaccine is therefore expected to be widely distributed in the third quarter and which will lead to continued strong growth in the second half of 2021. It is estimated that the travel, hospitality and entertainment sectors will be 8.3% below pre-pandemic levels by the end of 2020, but will recover losses from the summer of 2021. Germany is expected to face the Covid crisis better than its European partners, due to a better response to the second wave and due to greater participation in world trade. A short-term reversal in Southern Europe is also estimated, with Italy recording a better recovery in 2021 than Spain. For Greece, estimates show a recovery of around 5-6% in 2021. But the issue is not only the recession. It is also the debt. Goldman Sachs speaks of a sharp rise in public debt ratios and prolonged sustainability risks in southern Europe. Given generous support across the EU – including the PEPP and recovery plan – in 2021 fiscal easing will continue returns to the spotlight in 2022. Follow it on Google News and be the first to know all the news See all the latest News from Greece and the World, at

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