A double-dip recession in the euro zone is “increasingly inevitable” due to Covid-19, with France among the hardest hit countries, experts have warned.
The slowdown in business activity in the euro zone intensified in January as the pandemic continued to weigh on the economy, a key poll revealed on Friday.
The closely watched PMI index compiled by IHS Markit is believed to be the earliest indicator of economic health, and the latest reading confirmed fears that the year-long virus crisis remains strong.
France was among the hardest hit countries in the euro area, according to the PMI index compiled by IHS Markit, amid concerns about the country’s introduction of vaccination. In the picture: metal barriers block access to the pyramids of the closed Louvre in Paris
France was one of the worst hit countries in the euro zone. The news came amid concerns about the slower adoption of vaccines in the country than others.
Much hope has been put into distributing the vaccinations to reopen the economy, but the campaign in the EU is slower than hoped.
In the UK, which left the EU on January 1, the relapse into a third national lockdown sparked the sharpest decline in business since May, with service companies hit hardest, according to the survey.
The series of malicious bans is largely due to the spread of a more contagious virus strain.
A preliminary “flash” UK Composite Purchasing Managers’ Index (PMI) fell to 40.6 in January from 50.4 in December in the poll announced on Friday.
However, the UK vaccination program was rolled out much faster than countries on the continent, in part due to the ability to avoid European bureaucracy since Brexit that is holding others back.
In the UK, 8.01 doses of vaccine were given per 100 people as of January 22nd. In France, however, it was only 1.26, in Germany 1.67 and in Spain 2.36.
Pictured: Bournemouth International Center in the UK. The UK vaccination program was implemented much faster than the countries of the continent, thanks in part to its ability to avoid the European bureaucracy holding others back
Pictured: A graph showing the cumulative Covid-19 vaccination doses given in 100 countries per 100 people on January 22nd
“A double-dip recession for the eurozone economy seems increasingly inevitable as tighter Covid-19 restrictions continued to weigh on businesses in January,” said Chris Williamson, chief economist at IHS Markit.
This meant that the economies of the 19 countries using the single currency dominated by Germany and France would slide back into recession after only a very brief recovery in the European summer.
The company’s closely watched PMI index fell from 49.1 points in December to 47.5 points this month, further from the 50-point level that indicates growth.
However, Williamson noted that the bad start to 2021 would be less damaging than the economic collapse seen in the first wave of the pandemic last year.
This was due to “the continuing relative resilience of the manufacturing sector, increasing demand for exported goods and, on average, less stringent lockdown measures than last year,” he said.
The difference between France and Germany was remarkable.
The almost empty Pariser Platz in front of the Berlin landmark Brandenburg Gate (Brandenburger Tor) was reflected in a shop window on January 22, 2021. Europe’s top economy Germany extended its partial lockdown this week until February 14, 2021. A preliminary “lightning bolt” The UK Composite Purchasing Managers’ Index (PMI) fell from 50.4 to 40.6 in January