After the unprecedented Corona slump in the global economy, an EU forecast is optimistic about the future. The economy is recovering, but the growth rates vary considerably from country to country.
According to a forecast by the EU Commission, the economic output of the European Union should be back to pre-crisis levels by the end of the year. The Brussels authority announced on Wednesday that the economy is recovering faster than initially assumed.
It is assuming growth of 4.8 percent this year. The same goes for the euro zone. Compared to earlier forecasts, expectations have thus increased by 0.6 percentage points for the EU and 0.5 percentage points for the euro zone. In the coming year, growth of 4.5 percent is forecast for both.
According to the assessment, Germany will see economic output (GDP) growth of 3.6 percent this year and a 4.7 percent increase in 2022. The economy will grow faster than it has been in decades, said EU Economic Commissioner Paolo Gentiloni. This is attributed, among other things, to the advancing vaccinations and an effective corona containment strategy, which would have allowed the economy to reopen.
According to the report, the strongest growth rates this year are expected in Romania (7.4 percent) and Ireland (7.2). The forecasts for Spain (6.3) and Greece (6.0) are particularly favorable for the coming year. The economic output of the tourism countries also shrank in the crisis year 2020 with minus 10.8 percent in Spain and minus 8.2 percent in Greece in an EU comparison.
Risks from the new virus variants underlined the importance of accelerating the vaccination campaigns further, it said. Private consumption and private investment are the main drivers of growth, supported by more work thanks to the prospective economic recovery. EU Vice Commissioner Valdis Dombrovskis described the forecast as encouraging and attributed the optimistic forecast to the right political decisions at the right time.
The report also expects inflation to be 2.2 percent, 0.3 percentage points more than in the previous forecast. Next year the rate of inflation could be significantly lower at 1.6 percent. The European Central Bank (ECB) is aiming for an inflation rate of just under two percent in the medium term to achieve price stability. This is to ensure stable prices. For Germany, 2.8 percent inflation is assumed this year and 1.6 percent next year.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
