In the Autumn European Economic Forecast, European Commission revised up 2020 GDP projection to -7.8% contraction (up from -8.7%). Though, 2021 GDP growth projection was revised down to 4.2% (form 6.1%). Growth is projected to slow further to 3.0% in 2022. Inflation projection was left unchanged at 0.3% for 2020 and 1.1% for 2021. Inflation is expected to climb further to 1.3% in 2022. Unemployment rate is projected to be at 8.3% in 2020, 9.4% in 2021 and 8.9% at 2022.
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “This forecast comes as a second wave of the pandemic is unleashing yet more uncertainty and dashing our hopes for a quick rebound. EU economic output will not return to pre-pandemic levels by 2022.”
Paolo Gentiloni, Commissioner for Economy, said: “After the deepest recession in EU history in the first half of this year and a very strong upswing in the summer, Europe’s rebound has been interrupted due to the resurgence in COVID-19 cases. Growth will return in 2021 but it will be two years until the European economy comes close to regaining its pre-pandemic level. In the current context of very high uncertainty, national economic and fiscal policies must remain supportive, while NextGenerationEU must be finalised this year and effectively rolled out in the first half of 2021.”
