Eurozone | A massive spending spree is coming, but not until 2022

We have revised up our forecasts for eurozone private consumption, and now envisage spending increasing 3.1% in 2021 and by a staggering 7% in 2022. Our forecast, which is well to the upside of consensus (3.7% and 4.5%), is based on our view that most of the restraint on spending has been forced by lockdowns rather than being a voluntary response to uncertainty.

What you will learn from this report:

• We expect consumption to return to pre-pandemic levels as early as mid-2022, boosted by pent-up demand in the later stages of the recovery.
• We think consumers will spend about one-fifth of their huge excess savings through to 2025, equal to around 3% of the annual consumer spend.
• Having amassed excess savings worth €500bn in 2020, households still face curbs on spending options due to prolonged Covid containment measures. So by early-2022, excess savings could reach €840bn – 13% of 2019 consumer spending.