The latest figures for the European economy may have been better than expected but it is also "totally certain" the eurozone is heading for a double-dip recession, according to Christel Aranda-Hassel, chief economist for the EMEA region at the Japanese bank Mizuho.

The eurozone contracted 0.7 percent in the final quarter of 2020 and fell by 6.8 percent over the course of the year. Both of these figures were marginally worse than those for the wider European Union, which includes countries that do not use the bloc's single currency.

Any hopes of an economic recovery kick-starting in the first quarter of 2021 appear to have been quashed by new lockdown measures across the continent and problems with the European Union's vaccine campaign.

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Historic recession

Last year, the pandemic plunged the eurozone into its worst recession since its records began in 1995. A recession is generally defined as two quarters of negative economic growth.

The eurozone's gross domestic product (GDP) recovered some ground last summer as lockdown restrictions were eased, but the respite proved to be temporary. The eurozone is now set to return to recession in quick succession, known as a "double-dip."

"I do believe the first quarter [of 2021] will be negative, but not as negative as we saw in spring last year," says Aranda-Hassel.

"First, we are learning to live with lockdowns but the second big difference is that not all sectors are as closed as they were in spring last year and this is especially true for industry," she adds.

'Big whoosh'

Economists have debated throughout the pandemic whether countries will experience a quick "V-shaped" recovery, or a slower "U-shaped" one.

The turning point or "big whoosh" moment in this bounce back is now set to be in the third quarter of 2021, according to Aranda-Hassel.

"You have increasing pent-up demand – don't forget that there are a lot of us who want to finally go out again and spend money again. The more you push that pent-up demand out, the more likely it is that the bounce back is stronger," explains Aranda-Hassel. "But I do agree that we need to wait for the vaccine roll-out to become broader."