Euro zone: towards a slow and gradual economic recovery according to BNP Paribas

  •   12/06/2020 - 10h19
  •   DEHOUI Lionel

Since the decline of the covid-19 pandemic in some European and EU countries, the objective of the latter remains common. They all dream of a rapid and relapse-free economic recovery. In recent weeks, the deconfinement process has been underway in countries such as Italy and even France. Today, they are gradually getting back to work. But this recovery will be slow and gradual according to BNP Paribas. Indeed, many analysts at BNP Paribas believe that the Eurozone's economic sector will do better in the second half of the year. They are basing this on the lifting of the containment measures adopted to deal with the spread of the new coronavirus. In their view, the Eurozone should be more cautious because of the very high level of uncertainty. These included the spread of covid-19, but also economic objectives. Information: It should be noted that these different points of analysis were discussed this Wednesday by Luis Boisset. The man works there as a well-known economist dealing with the euro zone. His statement was collected during an online conference. In it, he said that the current health crisis caused by the coronavirus will impact both supply and demand in the zone in the long term.

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Euro zone: towards a slow and gradual economic recovery according to BNP Paribas

Estimates of GDP per quarter

The BNP Paribas bank team is more pessimistic now than it was a few weeks ago. However, it considered the first signs of a slight recovery. The economic research team is now forecasting a 13.6% decline in GDP (Gross Domestic Product). This is the GDP within the euro zone in quarter 2. For the first quarter of the zone, the economy was revised on Tuesday.

According to specialist estimates, there will be a contraction of -3.6% compared to -3.8% previously. In addition, during the last two quarters of the year, economic growth should be seen in the form of much-anticipated increases in GDP. GDP is expected to grow by 7.7% and 4.1% respectively in the third and fourth quarters according to BNP Paribas estimates.

 

Slow and gradual restart

Nevertheless, economist Louis Boisset pointed out that the recovery will be slow. There is a particular situation on the horizon in the advanced economies. The level of activity in these European countries will remain below its level at the end of 2019. According to analyst Louis Boisset, this will be the case until the forecast horizon: i.e. until the end of 2021. However, according to BNP Paribas, growth will be 5.8% in 2021.

This will follow a 9.2% decline over the year 2020 as a whole. According to the French bank's economist, the recovery will also be gradual. Businesses will have to adapt to the existence and presence of the coronavirus while taking into account the uncertainties. They will have to modify their lifestyle until a vaccine is produced or widely distributed. This is going to be a bit difficult since the advent of this crisis.