July 25, 2021

The European Commission revises its growth forecasts again upwards

It is on a positive note that the economists of the European Commission are preparing to go on vacation. In their forecasts (called “summer”), published Wednesday, July 7, they paint a picture of a Europe that is recovering and is erasing the economic devastation of the Covid-19 pandemic faster than expected. As they had already done in May, they are revising their forecasts upwards. “The European economy was to record this year the strongest growth it has seen in decades”, comments Paolo Gentiloni, Commissioner for the Economy.

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According to the Commission, gross domestic product (GDP) is expected to increase by 4.8% this year and 4.5% in 2022, both within the euro area and the European Union (EU). In the spring, it was betting on a rebound of 4.3% for the monetary union (4.2% for the EU) in 2021, then of 4.4% (in both cases) in 2022. In this context, the national wealth of the euro zone should return to its level of 2019, before the pandemic plunges the Old Continent into the worst crisis it has known since 1929, in the last quarter of 2021, three months earlier than expected.

The economy contracted significantly less in the first quarter than Commission experts had expected. Eurozone GDP fell 0.3% when they anticipated a 0.6% drop. Several countries – the Baltic States, but also Greece, Cyprus, Malta, Luxembourg, Ireland, as well as Slovenia, Bulgaria, Croatia, Hungary, Romania, Poland and Sweden – have even posted a positive growth at the start of the year. Even Italy can be proud of an increase in activity (by 0.1%) in the first quarter.

The progress of vaccination prompts Brussels to optimism

France and Germany, for their part, continued to see their GDP contract over the first three months of the year, after having fallen respectively by 7.9% and 4.8% in 2020. But France is expected to do so. see a rise of 6% in 2021 and 4.2% in 2022. And across the Rhine, growth should reach 3.6% this year and accelerate to 4.6% in 2022.

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In general, the progress of vaccination campaigns encourages Brussels to optimism, while the restrictions on the smooth running of the economy are lifted one after the other. As of Monday, July 5, the date of the latest figures available, 482 million doses of vaccines had been delivered to the Twenty-Seven, 376 million had been administered. In total, nearly 63% of the adult population had received at least one injection and almost half of the population (45%) was fully vaccinated. In this context, the community executive considers credible its objective that 70% of those over 18 be immunized in July.

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