Fresh COVID surge threatens economic recovery of Europe

A fresh surge of the coronavirus cases across the Europe is leading to fears of a new wave of the pandemic amidst a tough winter. The fresh wave could jeopardize the strong economic recovery from the pandemic in the region. For now the fresh COVID-19 wave has only a limited impact on the business activity in 19 countries that use euro. While the current condition seems to be on a good recovery level, the future seems to be in darkness.

The government of Austria made an announcement last week that mentioned that it is going back to a national lockdown. Moreover, fresh infections in Germany have also sparked fears if the largest economy of the region would be forced to reimpose restrictions. Chris Williamson, the chief business economist at HIS Markit said that the month of November saw a good improvement in business activities and had also defied the expectations of the economists of a slowdown. But now the rising number of cases in the European zone is posing a threat towards renewed disruptions in the economy.

Ruben Segura-Cayuela, the Europe economist at Bank of America has said that more data is needed that will help to assess what level of restrictions has to be levied in the region. He also noted that every wave of COVID had declined the abilities of businesses and consumers. Ruben also said that a reaction is surely expected but it cannot be said if it would be of the same magnitude. He also assured that going by what has been observed since the past few months, the impact could be on a smaller level.

The European region was hit hard by the pandemic in 2020 and the economic output had gone down by 6.3 percent in the euro zone compared to the 3.4 percent decline in the United States. However, the region faced a rebound in recent months as the vaccination rates went up.

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