Eurozone GDP is expected to return to pandemic levels by the end of 2021

For months, the European Commission has been downplaying pessimism. While the Kovid-19 pandemic rage continues and the possibility of new variants appearing remains relevant, its latest economic forecasts, published on Wednesday, May 12, are paving the way for recovery from the crisis. . After a 6.6 percent decline in 2020 and a further decline in the first quarter, euro area gross domestic product (GDP) is expected to grow by 4.3 percent this year (4.2 percent within the European Union), followed by 4.4 percent (in both cases) by 2022. Finally, in February, commission experts engaged in a difficult exercise of forecasting, betting on growth as low as half a point, whether in 2021 or 2022.

“The shadow of Kovid-19 begins to recede from the European economy”, Summarized by Finance Commissioner Paulo Gentiloni. The spread of immunizations – to date, 27.7% of the European population has been given the first dose – is a breeding ground that can gradually redeploy intercontinental growth by removing restrictions on activity. So many motors have to power it. First, household consumption, especially the very forced savings. Moreover, external demand from other parts of the world increased. Especially from the US: Joe Biden’s recovery plan is set to grow by 0.3 points in Europe in 2021 and 0.2 in 2022.

Intermediate situation

Finally, the Commission estimates, «L.‘Public investment as a percentage of GDP is expected to reach a ten-year high in 2022.. Special thanks to the 50 750 billion European recovery plan (390 billion grants and 360 billion loans), first payments expected this summer, best for some countries in July and more likely for others in September. If the 27th National Parliaments have already signed the agreement – at this point, eight are still missing (Estonia, Ireland, Hungary, the Netherlands, Austria, Poland, Romania, Finland) – the Commission intends to finance the project to clear the debt.

Overall, by the end of 2022, economists in Brussels will have pumped 140 140 billion into the European recovery plan, which was not taken into account in their previous forecasts, representing an additional growth of 1.2 per cent to 27 per cent. .

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