Easing of lockdowns won’t prevent dire Q2

Official data published this week provided further confirmation of how badly the lockdowns hit economic activity in the euro-zone at the tail end of Q1. But governments are now lifting their restrictions, and in some cases quicker than they had previously suggested. This provides some hope that the slump in Q2 – which will still be the worst on record – won’t be quite as bad as we have pencilled in. And next week’s flash PMIs for May will give us some indication as to whether a little more optimism is warranted.