Eurozone Economic Outlook: Second Covid wave hampers recovery (December 2020)

After a sharp recovery in Q3, economic activity will decrease again in Q4 due to new lockdowns. Annual inflation will remain low, with a moderate acceleration in the first quarter of 2021 but the speed will accelerate in Q2. The outlook is subject to both upside and downside risks, depending on the effectiveness of economic policies, the evolution of the pandemic, the rollout of vaccines and the effects on the economy of Next Generation EU funds.