The October 2020 World Economic Outlook predicts that the global economic downturn caused by the Covid-19 pandemic will be deep, and asymmetric among countries. The forecasts for the European economies’ growth rate reflect a rapid V-shaped recovery, which is to start in the second half of the current year.
The Eurozone economy as a whole is expected to shrink by 8.3% for 2020, with the biggest declines predicted for the countries of Southern Europe. Specifically, Spain’s economy is predicted to decline by 12.8%, followed by Italy (-10.6%), Portugal (-10%) and France (-9.7%). The Greek economy is projected experience a recession of 9.5%, with slower recovery rates than other economies for 2021, but with stabilization at higher levels for 2022 and 2023. Germany shows a relatively small recession of -5.9 %, with lower growth rates from 2021 onwards.
Among the risks for the further escalation of the status quo lie potential pandemic outbreaks, lack of progress on vaccine development, lack of funding for support measures, and financial instability.