The euro zone economy is already in its deepest recession on record, according to a Reuters poll of economists, who have stuck to a bleak outlook and worry the downturn might be even worse as coronavirus lockdowns across the bloc take their toll. That comes despite the European Central Bank pledging to buy more than 1 trillion euros in assets this year to cushion the blow and governments outlining hundreds of billions in spending plans to bridge businesses and support workers.
The latest Reuters poll, taken April 14-22, showed the bloc’s economy contracting by 3.1% in the first quarter and 9.6% in the current quarter. That compares with 3.3% and 9.3% contractions, respectively, predicted in a poll published on April 3.Those forecasts for the quarter-on-quarter downturn have not changed much over the past few weeks, unlike the outlook for the United States. But if realised, this quarter would mark the sharpest decline on record.
The euro zone economy was then expected to grow 5.2% in the third quarter and 2.9% in the final quarter of this year, compared with 6.0% and 2.0% forecast in the poll a few weeks ago. But 95% of economists said the risk to their forecasts for the second half of this year were skewed more to the downside. For 2020 as a whole, GDP was forecast to contract 5.4%, the worst year since the common currency was introduced in 1999. That is still better than the International Monetary Fund’s latest forecast for a decline of 7.5%. But asked for their worst-case scenario, the median view was for a 12.0% contraction in 2020. Reflecting the high level of uncertainty, the forecasts ranged from -5.0% to -21.0%.
About 70% of nearly 50 economists who responded to an additional question said the recovery would either take the shape of a “U” or a tick mark. Only one-fifth expect it to be a quick, “V”-shaped recovery. The euro zone’s three largest economies – Germany, France and Italy – have been severely affected by the COVID-19 virus and while the curve for new cases has declined, the lockdowns were still in place. Germany’s economy was expected to contract 5.3% this year, France’s by 5.5%, Spain’s by 6.6%, with Italy taking the biggest hit, shrinking 7.8% this year, medians from the poll showed.
The IMF estimated -7.0% for Germany, -7.2% for France, -8.0% for Spain and Italy was estimated to contract 9.1%. But the range of views for this year in the latest Reuters poll for all were wide, from no growth for Germany to as low as -18% for Italy.
Source: Reuters
Finnish site 
Global site