Eurozone headed for a double-dip recession as the slow vaccine rollout prolongs the economic misery
The eurozone is heading for a double-dip recession as the slow rollout of Covid-19 vaccines prolongs economic misery across the region.
In a bleak update, research group IHS Markit said output in the single currency bloc was on course to fall over the first three months this year.
That would follow a 0.6 per cent contraction in the final quarter of last year – plunging the region back into recession after the most brief of recoveries over the summer.
Double dip: In a bleak update, research group IHS Markit said output in the single currency bloc was on course to fall over the first three months this year
By contrast, the UK economy grew 1 per cent in the final quarter of 2020, meaning a double dip will be avoided even if output slides in the first quarter of this year.
And while analysts said the UK can look forward to ‘a summer of roaring trade’ as the rollout of the vaccine leads to an easing of restrictions, the outlook in the eurozone remains more subdued.
Chris Williamson, chief business economist at IHS Markit, said the eurozone was ‘on course for a double-dip recession’.
He added: ‘It is becoming clear that many virus-fighting measures will need to be in place for some time to come, in part due to the slow vaccine rollout.
‘This could extend the drag on the economy from the pandemic into the second half of the year and subdue the pace of recovery.’
The eurozone economy contracted in the first two quarters of 2020 as the pandemic wreaked havoc. It recovered in the third quarter of the year – from July to September – but has since shrunk again.