The confidence recovery could only gain traction as of Easter 2021, under the hypothesis of a larger scale vaccination campaign being implemented and continued fiscal support from the government. We find that returning to the pre-crisis confidence level (i.e. that seen in February 2020) by end 2021 could generate close to EUR10bn in additional consumption in 2021 itself, and explain above one third of total consumption gains in 2021 (EUR27.4bn). However, with deteriorating labor market conditions amid rising insolvencies, we expect consumption expenditure to recover to its pre-crisis levels only in 2022.

The confidence recovery as well as the reopening of the Covid-19 sectors throughout 2021 is also likely to unleash close to EUR20bn of excess savings. We estimate that improved confidence and pent-up demand would unleash a total of EUR19.5bn of household excess savings, with EUR5bn of excess savings from the 10% richest households and EUR9bn from the upper medium class. Overall this unleashing of savings should bring around +1.0pp of additional GDP growth in 2021.