Europe’s economy is likely to contract by 7% this year – its biggest drop since World War II. This is due to months of lockdowns imposed by governments keen to stop the spread of a virus that killed nearly 376,000 people in Europe last year.
While there is no V-shaped recovery in sight, the IMF expects Europe to grow around 4.7% next year, with much of the growth in the second half of 2021 as more people get vaccinated against Covid-19, travel restrictions ease and grants and loans to fragile economies come from the € 750 billion stimulus fund (920 billion dollars) from the EU.
The assumption underlying many business models “is that we will achieve collective immunity in Europe by the end of 2021,” says Nadia Gharbi, senior economist at Pictet Wealth Management in Switzerland. “At the end of the second quarter, we expect [lockdown] almost all measures to be lifted. “