Eurozone | A massive spending spree is coming, but not until 2022
We have revised up our forecasts for eurozone private consumption, and now envisage spending increasing 3.1% in 2021 and by a staggering 7% in 2022. Our forecast, which is well to the upside of consensus (3.7% and 4.5%), is based on our view that most of the restraint on spending has been forced by lockdowns rather than being a voluntary response to uncertainty.
What you will learn from this report:
- We expect consumption to return to pre-pandemic levels as early as mid-2022, boosted by pent-up demand in the later stages of the recovery.
- We think consumers will spend about one-fifth of their huge excess savings through to 2025, equal to around 3% of the annual consumer spend.
- Having amassed excess savings worth €500bn in 2020, households still face curbs on spending options due to prolonged Covid containment measures. So by early-2022, excess savings could reach €840bn – 13% of 2019 consumer spending.
Tags:
Related Services
Post
Finland’s growth forecast cut amid weak confidence and soaring inflation
We have lowered our 2022 GDP growth forecast for Finland to 1.5% from 1.7% last month, as weakening confidence further dampens the outlook. We expect inflation to peak higher with a greater passthrough to core prices, squeezing real incomes and denting consumption. Russia has accounted for almost 10% of Finland's goods trade, among the highest in Europe.
Find Out More
Post
Why we see eurozone inflation slowing sharply next year
We have revised our 2022 eurozone inflation forecasts sharply higher, to 6.0%, since the start of the Ukraine war, as energy and food prices began to soar and new supply bottlenecks emerged. That said, we still see inflation decelerating sharply to 1.3% in 2023, putting us below consensus. While we recognise significant risks to our views, inflation should slow to below 2% in H2 2023.
Find Out More