(RTTNews) – The eurozone is expected to suffer an even deeper recession due to the coronavirus pandemic despite measures taken at European and national level, the European Commission said in its summer forecast published on Tuesday.
The monetary bloc is expected to contract to 8.7% in 2020 instead of the projected 7.7% in the spring forecast. However, the region is expected to grow by 6.1% in 2021, which was less physically powerful than the 6.3% expansion expected in the past.
As the scale and duration of the pandemic remain unknown, the dangers to forecasts are exceptionally high and basically descending. Forecasts assume that blocking measures will continue to minimize and that there will be no “second wave” of infections.
We continue to sail in stormy waters and face many risks, adding a primary wave of infections,” said Valdis Dombrovskis, Executive Vice President of An Economy for People.
“Looking towards this year and next, we can expect a rebound, but we’ll have to keep an eye on the other recovery speed,” Dombrovskis added.
The outlook for inflation has not replaced much since the spring. Inflation is estimated at 0.3% in 2020 to the past 0.2% outlook. Forecast for 2021 has not been revised to 1.1%.
Among the largest countries in the euro area, there were higher-than-average GDP contractions in France, Italy and Spain, while Germany and the Netherlands experienced minor effects.
Germany’s real GDP was forecast to decline in 2020, largely in line with the spring forecast, by 6.3 percent. Starting the recovery in the second half of this year, the economy will grow 5.3 percent in 2021, EU said.
Spain’s annual GDP growth in 2020 was forecast at 10.9 percent, about 1.5 percentage points lower than projected in spring. GDP growth for 2021 was broadly unchanged from the previous forecast, at 7.1 percent.
France’s GDP is expected to fall to 10.6% this year. The economic recovery is expected to run in 2021, with GDP expanding by 7.6%.
Italy’s genuine GDP is expected to fall to 11.2% this year, but grow to 6.1% by 2021. However, genuine GDP is expected to return to its point in 2019 by the end of 2021.
UK GDP was forecast to fall by about 9.75 percent in 2020 and to grow by 6 percent in 2021. Projections for 2021 were based on a purely technical assumption of status quo in terms of trading relations between the EU and the UK.
The EU region is expected to fall by 8.3% this year, but it will accumulate by 5.8% next year. The rate for 2020 revised through -7.4% and the rate for 2021 to 6.1%.