Eurozone Economic Outlook
June 2, 2020
A second estimate confirmed the Eurozone economy contracted at an unprecedented pace in the first quarter, as lockdown measures adopted in March froze business and household activity. Moreover, the prolongation of containment measures, which are now gradually being lifted, will deal an even harder blow to the economy in the second quarter. The economic slump is translating into quickly deteriorating fiscal metrics, which prompted the ECB to warn already-highly indebted countries such as Italy and Spain of rising risks of debt sustainability. Complicating matters, in early May, Germany’s Constitutional Court questioned the legality of European monetary policy and threatened to prevent Germany’s Bundesbank from making additional asset purchases unless the ECB proves it was not excessive within three months. Meanwhile, following a Franco-German proposal of a EUR 500 billion recovery fund, the European Commission sketched a proposal for a EUR 750 billion stimulus plan, the first step of lengthy discussions.Eurozone Economic Growth
The pandemic will leave a desolate economic landscape in its path, ravaging investment activity and household spending amid soaring unemployment figures. Moreover, the tourism sector will be hard hit, depressing external demand. On top of that, sharply deteriorating public finances and worsening bank credit quality pose further downside risks. The economy is seen contracting 8.2% in 2020, which is down 1.2 percentage points from last month’s forecast. In 2021, GDP is seen increasing 5.8%.Eurozone Economy Data
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Eurozone Facts
| Value | Change | Date | |
|---|---|---|---|
| Exchange Rate | 1.12 | 0.65 % | Dec 31 |
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Eurozone Economic News
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Eurozone: Unemployment rate ticks up in March as coronavirus blow starts to bite
April 30, 2020
Labor market conditions in the common currency bloc deteriorated in March, the first month when COVID-19 containment measures began to be extensively introduced, according to data released by Eurostat.
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Eurozone: Inflation slumps to over three-year low in April on plunging energy prices
April 30, 2020
Harmonized inflation fell to 0.4% in April from March’s 0.7%, marking the lowest reading since September 2016, according to a flash estimate released by Eurostat on 30 April.
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Eurozone: Coronavirus crisis strikes unprecedented blow to Eurozone economy in Q1
April 30, 2020
The Eurozone economy contracted sharply in the first quarter of this year, after marginally expanding in Q4 2019.
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Eurozone: ECB cuts rates on long-term liquidity operations and introduces new anti-pandemic auctions
April 30, 2020
On 30 April, the European Central Bank (ECB) decided to step up its efforts to combat the economic and financial shockwaves currently shaking the Euro area.
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Eurozone: Economic sentiment collapses at sharpest pace on record in April
April 29, 2020
Sentiment in the Eurozone tumbled at the sharpest pace in the survey’s history in April due to measures adopted to contain the spread of coronavirus, plunging to 67.0 points from March’s 94.2 points.
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