Istat: Eurozone economy recovering from the second quarter

"In the fourth quarter of 2020, economic activity in the euro area decreased less than expected but the recovery of production rates is expected starting from the second quarter of 2021".

This was announced by the joint note of Istat, Ifo and Kof 'Eurozone economic outlook'.

In the fourth quarter of 2020, euro area GDP fell by 0.7%, the statistical institutes note, while the fall in economic activity in 2020 was 6.6%. 

According to this analysis, the resumption of containment measures in some countries since the beginning of March to cope with the worsening of the pandemic situation for Covid-19 will have "negative effects" which "are expected to have only a transitory impact on the economy".

"The macroeconomic situation is characterized by a high degree of uncertainty that accompanies both the evolution of the pandemic and the speed of the vaccination campaign, and the timing of the implementation of the Next Generation EU program", reads the text.

Help could also come from the "recovery phase" of international trade which is "expected to continue, supported by the decisive strengthening of production rates in China and the United States".

On the inflation front, consumer prices are expected to rise in 2021. As for industrial production, it is "expected to show a cyclical increase of 1.6% in the first quarter of 2021 and then decelerate between April and June (+1 , 2%) when the growth rate on an annual basis will be higher than 24%, compared to the same months of 2020 marked by the presence of the lockdown period, which had characterized almost all the countries in the area ", continues the note.

In the third quarter of 2021, the cyclical dynamics would record a new improvement of 1.3% while "the recovery of investments would follow a slower pace".