Summer heralded recovery for the Eurozone as the third quarter GDP was higher than forecasts by analysts. There were few social restrictions and this spurred growth and recovery. This week, once again both Germany and France have announced lockdowns leading to expectations of a slow fourth quarter.
On Friday, the European bloc’s statistics office released the third quarter results. The gross domestic product has expanded by 12.7% in this third quarter, when compared with the previous one. This sharpest ever increase showed a comeback for the EU. However, this gain may be temporary as social restrictions have once again been tightened by governments.
France’s statistics office said that the country’s GDP increased by 18.2 % in the quarter beginning in July and ending in September. “We now have to contemplate the idea of a double-dip as the economy is knocked back by new restrictions,” Pantheon Macro’s Vistesen added.
The third quarter GDP in Germany grew by 8.2% when compared to the second quarter. Kenningham said, “These improvements are about to be washed away by the second wave of Covid-19 and a new round of national lockdowns.”
The lockdowns announced this Friday will erode the GDP in the next quarter. The European Central Bank has indicated that there would be more monetary stimulus. ECB President Christine Lagarde said, “We have done it for the first wave; we will do it again for the second wave.”