Over the months, the European Commission is becoming less pessimistic. Its latest economic forecasts outline a way out of the crisis.
The GDP of the eurozone is expected to return to its pre-pandemic level by the end of 2021. After dropping by 6.6% in 2020 and contracting further in the first quarter, the gross domestic product is expected to bounce back by 4.3% this year.
After dropping by 6.6% in 2020 and contracting further in the first quarter, the gross domestic product (GDP) of the eurozone is expected to bounce back and increase by 4.3% (4.2% within the European Union) this year, then grow by 4.4% (in both cases) in 2022.
In February, the last time the Commission’s experts undertook the challenging task of forecasting, they were betting on growth that was about half a percentage point lower, whether for 2021 or 2022.
Several drivers are expected to fuel this. Domestic consumption first, particularly boosted by vast forced savings. But also, a rising external demand from the rest of the world. And especially from the United States: Joe Biden’s stimulus plan is expected to add 0.3 percentage points of growth to Europe in 2021 and 0.2 in 2022.
In total, by the end of 2022, the European recovery plan, which the Brussels economists had not factored into their previous forecasts, will allow for the injection of 140 billion euros into European economies and represents an additional 1.2 percentage points of growth for the Twenty-Seven.
