France’s and Germany’s GDP is going to take a hit from the new restrictions but if they are eased again in time for Christmas the damage could be limited, according to Berenberg.
On Wednesday evening, the French President Emmanuel Macron announced a full national lockdown enforced from Friday to December 1.
Schools, factories, farms and construction sites will stay open but restaurants and non-essential shops will close, while people are advised not to leave the house if not necessary.
In Germany, 16 state prime ministers and chancellor Angela Merkel agreed on a new set of restrictions being enforced on November 2, with a package of €10bn for the most affected businesses.
The hospitality and leisure sectors will have to close entirely, hotels will be closed for German tourists, while schools and shops will remain open.
Berenberg said the French GDP may take a hit of 3-4% in the fourth quarter, while Germany may just suffer a 1% hit since the important retail sector is barely affected.
In France, retailers may be able to partly recover November losses if restrictions are lifted in December and consumer confidence rises ahead of Christmas.
“The experience of the months from May to September have shown that economic activity can snap back fast once lockdowns are eased,” analysts noted.
“We thus maintain our positive outlook for 2021, which we expect to be characterised by a strong gain in French and Eurozone GDP at low inflation rates and record support from monetary and fiscal policy.”
On Thursday, the European Central Bank said it “will recalibrate its instruments”, which Berenberg noted is “ECB language for taking action”.
As a result, the bank is expected to deliver a further monetary stimulus at the meeting on December 10.