Eurozone finance ministers are likely to remain optimistic about growth prospects when they meet today to discuss the latest developments, as the economy has learned to adapt to the pandemic over the past two years, officials told Reuters.
The emergence of the Omicron mutation has raised concerns among some economists that the European economy could head into new lockdowns after a crazy run since the start of 2020.
A senior official, however, who attended the meeting, in which the IMF will also present its views on the eurozone economy, said the new mutation increases uncertainty but does not change the big picture.
“The big picture is that the economic outlook remains favorable. Growth in the second and third quarters of the year has been rapid and the recovery is expected to continue,” he said, adding that the IMF would also be optimistic about a recovery in his report.
The Commission predicted in November that the eurozone economy would grow faster than previously expected in 2021 and would continue to grow rapidly in 2022 with deficits and public debt declining.
GDP is expected to grow 5% this year after falling to 6.4% in 2020. Growth in 2022 is expected to reach 4.3% and 2.4% in 2023.
“I think the expectation remains that we should not exaggerate the situation (with the pandemic difficulties), that we should expect the world economy to adjust to these imbalances in demand,” he added.
The official told Reuters that the economy had adapted to the pandemic, making it increasingly resilient thanks to vaccinations.
“Essentially, economic agents have developed new ways of working with the pandemic. So the expectation is that while the dynamics of the pandemic may affect the economic outlook, the consequences are unlikely to be as severe as we have seen in the past.” , said the eurozone official.
Ministers are also likely to approve a Commission recommendation to maintain fiscal policy assistance to the economy next year, albeit by shifting the focus from general support for all to targeted sector-specific measures.
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Source From: Capital
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