The recovery has been faster than expected, despite widespread coronavirus outbreaks. But it will be a long way back to square one. Even if the US avoids large-scale new lockdowns, unemployment will remain high ahead.
GDP plunged last spring, but with north-south disparities. Household goods consumption is leading the rebound, while manufacturing growth is slower. The new EU recovery fund will stimulate growth and improve cooperation.
The first country out of the crisis, China showed an unexpectedly strong GDP increase in Q2. However, its recovery is imbalanced and unsynchronised. Supply-side restrictions have eased, but the labour market will hamper growth.
The UK saw a bigger downturn in Q2 than the euro area and the US. Recovery will be shaky, with both COVID-19 and Brexit creating uncertainty. The BoE is prepared for more quantitative easing as needed, but is avoiding key rate cuts.
