ABN Amro har analyseret virkningen af den forværrede corona-situation med nye mutationer og konkluderer, at selv om det fører til flere lockdowns i nogle lande, vil det ikke påvirke bankens prognoser væsentligt, bl.a. fordi økonomien i eurozonen havde det bedre i 4. kvartal end ventet, fordi industrien i Europa og USA klarer sig rimeligt gennem krisen, og fordi Kina er en stærk aktør. Under den anden bølge er der ikke det økonomiske sammenbrud som under den første bølge sidste forår. Banken venter fortsat et stærkt opsving i andet halvår, og banken hæfter sig ved, at vaccinationerne er langt foran i USA i forhold til Europa.
Do virus developments challenge our base case?
Global Macro: Near term weakness largely priced into our central scenario –
Across a number of large economies, the virus continues to rage, putting pressure on hospital capacity and leading to extension or stepping up of lockdowns in many cases. At the same time, there are new risks on the horizon.
The new B.1.1.7 variant of Covid-19 (also known as the UK variant) is significantly more transmissible than its ancestry – around 70% more so. This means that in all countries where it gains a toehold, it will outcompete and ultimately supersede existing variants.
So far, it has been detected in at least 35 countries, including the US and most European countries. It is already dominant in most of the UK, and is about to become so in Ireland. For other countries, in France it is expected to be the dominant strain by February, and in the US by March.
While there is no indication that vaccines are not as effective against the new variant, nor that it causes more serious disease, the much higher transmissibility of the variant means that even with strict lockdowns, it is likely to put significant strain on healthcare systems until the vaccine rollout inoculates the bulk of the vulnerable proportion.
What do these developments mean for the economic outlook?
For the eurozone, we are already assuming relatively long and strict lockdowns. In our scenario we had already assumed that the lockdowns would not be lifted significantly before the end of Q1. As a result we are projecting a cumulative fall in GDP of around 4% over Q4 of last year and Q1 of this year.
However, the lockdown index is somewhat higher than assumed in our base case (around 70 versus 78 in the latest outcome), leading to some additional weakness in activity. At the same time, the eurozone data for Q4 were not quite as weak as we expected.
Against this background, we think the cumulative fall in GDP will be similar to our base case but the distribution will differ. We have revised our forecast for 2021Q1 GDP down, to a contraction of around 1.5% qoq from a contraction of around 0.8%.
At the same time, we have raised our forecast for GDP in 2020Q4, from a contraction of -3.8% qoq to a contraction of around -2.5% as growth the industrial sector has turned out to be more resilient than we had anticipated.
After these revisions in our forecasts for GDP growth in 2020Q4 and 2021Q1, the expected shortfall of GDP compared to the trend level at the end of 2021 has not significantly changed and is still around 4.5%.
Overall we think that the decline in GDP during the second wave of the pandemic (around 4% in total in 2020Q4-2021Q1) will be much more modest than the decline during the first wave (of 15% during 2020 Q1-Q2). This is largely due to the fact that the industrial sector has not been hit by lockdown measures or supply chain disruptions stemming from China during the second wave.
Meanwhile, developments in the US economy have been more positive than we have assumed. Despite worrying virus trends, the US has not imposed the kind of strict lockdowns that have been necessary in Europe.
In the US, around 10mn people have been vaccinated so far. Vaccinations are currently running at a 700k per day pace, and this is expected to accelerate to 1mn per day in the next week, according to the Health Secretary Alex Azar. On this trajectory, around 7% of the US population would be vaccinated by the beginning of March (i.e. have received two doses), and around 12% would be by the end of March.
Taken together, and despite the continued worsening of the pandemic in the US, the later spread of the new variant there means that it looks likely to avoid the kind of widespread lockdowns that have been seen in Europe.
Looking further forward, our conviction that advanced economies will grow rapidly in the second half of the year remains high. We continue to judge that the vaccine roll out will allow for a significant lifting of restrictions in Q2 and especially in Q3 of this year. In addition, significant fiscal stimulus, and accommodative financial conditions should also support demand.
