EU revises upward estimates for euro zone growth, inflation

Reuters reports that the European Commission revised upward its estimates for euro zone growth this year and next, but warned against risks posed by new variants of the coronavirus that should be contained to avoid new restrictions.

The EU Commission predicted the euro zone will grow by 4.8% this year, much faster than the 4.3% growth it had forecast in May.

The large revision is largely due to the reopening of the bloc's national economies in the second quarter which benefited the services sector and is expected to boost tourism within the EU, the Commission said.

The rebound from the economic crisis caused by the pandemic is projected to continue next year, when the euro zone is forecast to grow by 4.5%, more than the 4.4% expansion estimated in May.

The Commission warned however that risks about the outlook remained high, although they were seen as balanced.

It urged the further stepping up of the vaccination campaign to contain threats posed by the spread and emergence of variants of the coronavirus, and in particular by the more transmissible Delta variant. 

Inflation, which has become one of the main concerns for economists as global economic growth accelerates, is projected to reach 1.9% this year in the euro zone, up from the 1.7% the Commission estimated in May. Next year, it is expected to slow to 1.4%.