Slow vaccine rollouts biggest risk to euro zone economy

The euro zone economy will recover at a much weaker rate this quarter than expected only a month ago, according to a Reuters poll of economists who cited a slower vaccine rollout as the biggest risk over the next three months.

Britain and the United States have successfully inoculated large swathes of their populations but the euro zone vaccine rollouts, already riddled with problems, have hit more trouble recently just as infection rates rise.

While the April 12-15 Reuters survey showed the bloc was set to emerge from a double-dip recession and grow 1.5% this quarter, it was a sharp downgrade from 2.1% predicted in March and the lowest consensus since a poll in October.

Over 90% of economists, or 38 of 42, who answered an additional question said the biggest risk to that already modest outlook would be a slower vaccination drive.

Of those economists who said a slower vaccine rollout was the biggest risk, 85% either downgraded their Q2 growth forecast or kept it unchanged.

"The turn of the first quarter is where things became more complicated for Europe and it will have a negative impact on the first half of the year," said Yvan Mamalet, senior euro economist at Societe Generale.

"If the rollout of vaccinations doesn't speed up as much as we expect, it will probably mean lifting of restrictions will be at a later stage and the return to quasi-normality will have to be delayed further."

The bloc was expected to expand 2.3% in Q3 and 1.3% in Q4, roughly unchanged from March. But the range of forecasts for quarterly growth showed lower highs.

Source: Reuters

slower vaccine euro zone economy