Eurozone: Economic prospects have become more encouraging – Wells Fargo

The prospects for the Eurozone economy have become more encouraging as COVID-19 case growth continues to stabilize and activity and confidence indicators point to a less severe decline in the second quarter than previously anticipated, explained economists at Wells Fargo. 

Key Quotes: 

“High frequency mobility data also suggest that the economy has now recovered about 75-80% of the output from the COVID-19-related decline, which could also be consistent with a faster bounce back in Q3-2020.”

“We have become more constructive on the Eurozone economy, under the assumption that the COVID-19 pandemic remains under control and data continue to improve. We now look for a smaller Q2 GDP fall and faster Q3 GDP rebound. We have also become less pessimistic on 2020 overall, and have revised our forecast to a smaller 7.7% GDP decline for full-year 2020 GDP, compared to the 8.9% contraction we forecasted a month ago.”