Once the short period of recovery ends, countries of the EU may enter a new recession, FT reports. They believe that a downturn in the economy is possible in Q4 as the number of those infected with COVID-19 is growing and new restrictions are introduced.

Even though the GDP of the eurozone expected to display record growth in Q3 2020, the FT writes, increasingly more countries are lowering their forecasts for Q4. G + Economics Chief Economist said in an interview with the newspaper that the persisting threat of COVID-19 and related lockdowns « make a double-dip recession the main expected scenario ». Besides, the downturn can also intensify consequences of Brexit, she added.

Chief Economist at German Commerzbank told FT that governments of the EU have « learned from the consequences of the first wave » and would not introduce a total lockdown once again as it poses a serious threat to the economy. However, even if the restrictive measures do not affect companies as much as they did this spring, the economy will still suffer because of the pandemic, FT writes.

Chief Economist at Unicredit believes that Europe might face negative GDP growth if « people hide [from the virus] and stay home ». This would lead to lower economic activity and higher savings. In addition to his words, FT cites a data analysis by Google, which shows that in many European cities, including Paris, Amsterdam, London, Madrid, and Berlin, attendance at restaurants, shops, cafes, and other venues declined markedly earlier this month.

source: ft.com