FRANKFURT: Europe’s stuttering efforts to overcome the coronavirus crisis may finally be about to reach a turning point.
After a troubled start to its vaccination drive, progress on ramping up inoculations in the second quarter will determine whether the eurozone can finally shake off the worst economic turmoil in living memory or languish further behind its peers.
Three months of tentative immunisations recently forced more optimistic forecasters from JPMorgan Chase & Co to UBS AG to cut growth outlooks for 2021.
At the same time, the prospect of real progress during the current quarter is making comparatively cautious projections for the region now seem achievable.
That still won’t be easy. Success will require authorities to administer millions of jabs every week while battling resurgent outbreaks that have triggered renewed lockdowns. France is poised to enter a renewed phase of restrictions.
“The base case is that, if vaccinations progress and the weather gets better, things will improve, ” said Dirk Schumacher an economist at Natixis in Frankfurt.
“Given the level of pent-up demand, this should ignite solid growth rates. If infection dynamics keep rising and there’s a complete shutdown, of course this is not going to happen.”
A second-quarter turnaround would already mean a costly delay inflicted by the European Union’s flawed procurement of vaccines, patchy delivery and a sluggish rollout. Barely 10% of EU residents have received at least one dose, little more than a third of the US tally.
This is “short of what we had expected, ” European Central Bank (ECB) president Christine Lagarde told Bloomberg Television on Wednesday.
Those failures meant more extensive lockdowns, hurting growth. More optimistic forecasters have downgraded outlooks for 2021, including JPMorgan Chase, which now sees 5.3% growth instead of 5.8%, and Deutsche Bank, whose prediction fell to 4.6% from 5.6%. — Bloomberg