Euro-zone GDP looks set to fall in Q4, but the prospect of vaccine rollouts has significantly improved the outlook. We think that containment measures will be scaled back when the most vulnerable members of society are inoculated, which will probably be during the second quarter of next year. This suggests that euro-zone GDP will rebound rapidly in Q2 and Q3 next year. We suspect that growth will then remain above trend until at least the end of 2022. Our new forecasts are stronger than the consensus and ECB projections. When the ECB updates its forecasts next week, we expect it to remain cautious about economic prospects, in part because it will want to reinforce its dovish message.
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