Eurozone | Delta variant becomes key downside risk to the outlook
We expect the more transmissible Delta coronavirus variant will have a much lower impact on European economies than previous waves, although some will be more affected than others. Vaccines have significantly weakened the link between cases and hospitalisations, reducing the likelihood of lockdowns.
What you will learn:
- The re-imposition of restrictions or voluntary changes in behaviour could pose risks to the economy. The tourism sector faces the most immediate impact – indeed, several governments have already tightened restrictions on travel and hospitality.
- While leading indicators continue to suggest this summer will be significantly better than in 2020, a sharp rise in hospitalisations would impact our growth forecasts, especially in Southern Europe.
- We expect the response by governments to the surge in cases will be different this time and aimed more at limiting the economic damage. Governments are putting their faith in the protection vaccines afford, and attention is now turning to concerns over public finances.
Tags:
Related Services

Post
BoK’s monetary policy to tighten even as hiking cycle ends
Even without rate hikes, central banks' monetary policies can effectively tighten if the nominal neutral rate falls below the policy rate. We expect this will be the case for the Bank of Korea this year, as the gap between the policy rate and the nominal neutral rate widens.
Find Out More
Post
China: Emerging green shoots in Spring, but not out of the woods
We now incorporate a faster recovery from the post-Covid exit wave and raise our 2023 full-year GDP growth forecast to 4.5% (from 4.2% previously).
Find Out More