The assessment is due to the unique characteristics of this recession. What we saw in 2020 was not a recession in the traditional sense of the word, caused by significant economic imbalances that take time to address, but an unexpected shock caused by the pandemic.
The impact has been very strong as restrictions on the movement of citizens and economic activity – especially in the services sector, which is the most important for our economies – have been significant. But the demand reduction was imposed and not the consequence of a lack of purchasing power or credit. And as such, the recession stood ready to bounce back as soon as the restrictions lifted off.
Therefore, the rebound will be strong and rapid, and, in the meantime, households' consumption habits will evolve and adapt to this unique context. The recession is less pronounced, everywhere.
In Japan where the decline compared to the previous quarter is finally only 1,0%. The reduction in household consumption is less significant than initially announced, and firms do not hesitate to build up large stocks.
A similar scenario for South Korea, where growth reached 1,7% compared to the previous quarter, was supported mainly by the strong investment return and the construction sector.
Despite the imposition of new restrictions, the euro area's GDP fell by only 0,3% compared to the previous quarter and by 3% over one year, in particular, due to the positive contribution of investment as well as to the build-up of stocks by companies that fear supply problems.
Japan, South Korea and Eurozone are three regions where the recovery expects to continue to grow in the coming quarters as the vaccination campaign progresses and the global economy reopens.
In the portfolio, we maintain exposure to equities of these countries as part of our diversification strategy.
Pending a European recovery that is expected to be vigorous, the restart of investment and the accumulation of stocks made it possible to limit the damage in the first quarter.