Any potential lifting of restrictions going into June is likely to facilitate a slight return to retail activity, though the impact of lockdown throughout April and May means the picture for Q2 as a whole is entirely negative. Our forecasts estimate household consumption to fall by 19.5% over the course of the current quarter, before picking up from Q3 onwards.
Consumer activity is expected to remain suppressed for much longer than this, however, with lingering fears over the virus, the continued need for social distancing, and wider economic uncertainty all serving to restrict spending. In a stark illustration of the economic impacts of coronavirus, we do not expect household consumption to reach pre-crisis levels until the mid-2020s.
With restrictive measures as we currently know them highly unlikely to remain in place for this sort of timescale, this forecast highlights the longer-term effects of the current crisis on consumer spending, showing that the economic consequences will not solely be confined to the lockdown period.
