An uneven recovery across sectors and countries increases the risks of fragmentation The pandemic crisis has put great pressure on economic activity, with euro area growth expected to fall by slightly less than 8% in 2020. While the gradual relaxation of social distancing measures created a strong yet incomplete rebound in economic activity in the third quarter, that recovery started losing momentum.
The tighter containment measures recently adopted across Europe are weighing on current growth. With the future path of the pandemic highly unclear, risks are clearly tilted to the downside. Economic uncertainty is being augmented by geopolitical risks, such as the possibility of a no-deal Brexit.