The economic rebound in the eurozone is expected to be less than previously expected, at 4.2% in 2021, after a 7.8% recession in 2020, according to the economic growth forecasts of the European Commission on Thursday. Economic growth in the third quarter is estimated at 3%.
Key takeaways summarized by Reuters:
“The eurozone will contract 0.1% quarter-on-quarter in the fourth quarter due to restrictions from the second wave of COVID-19.”
“Inflation in the euro area will be 0.3% in 2020, 1.1% in 2021 and 1.3% in 2022.”
“Unemployment in the eurozone will reach 8.3% in 2020, 9.4% in 2021 and 8.9% in 2022.”
“The eurozone’s aggregate budget deficit will rise to 8.8% of GDP in 2020 from 0.6% in 2019, seen at 6.4% in 2021 and 4.7% in 2022.”
“Eurozone public debt will rise to 101.7% of GDP this year from 85.9% in 2019, and is forecast to rise to 102.3% in 2021 and 102.6% in 2022.”
“Economic forecasts are surrounded by exceptional uncertainty.”
“Forecasts assume that coronavirus-related restrictions will remain in place for the next two years, but will gradually ease and their impact will lessen.”
“The forecasts technically assume that there will be no trade agreement with Great Britain and that trade from January 1 will be on WTO terms.”
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Credits: Forex Street
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