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- Eurozone economy to rebound more strongly in 2021, 2022 - European Commission
Eurozone economy to rebound more strongly in 2021, 2022 - European Commission
Reuters reports that the European Commission said that the eurozone will rebound from its COVID-19 slump more than expected, but some countries won’t reach pre-crisis levels before the end of 2022.
The aggregate growth of the 19 countries sharing the euro currency should be 4.3% this year and 4.4% in 2022, the European Commission said, revising upwards its forecast from February of 3.8% growth in both years.
“Growth rates will continue to vary across the EU, but all Member States should see their economies return to pre-crisis levels by the end of 2022,” the Commission said.
The need to return to pre-crisis levels has been an argument for the suspension of EU borrowing limits for governments in 2020 and 2021 and the Commission said in March that while its final decision would depend on the May forecasts, the EU should keep the limits suspended in 2022 to help economies rebound.
Government borrowing to keep economics alive during pandemic lockdowns will boost euro zone public debt to 102.4% of GDP this year from 100% in 2020. It will only edge lower to 100.8% in 2022, the Commission forecast. The aggregate euro zone budget deficit is to balloon to 8% of GDP this year before halving to 3.% in 2022.
Inflation, which the ECB has struggled for years to bring closer to its target of below, but close to 2%, should accelerate to 1.7% in 2021 and slow down to 1.3% in 2021.
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