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The European Commission on Wednesday presented a more optimistic assessment of the performance of the 27 economies this year, citing an improved vaccination campaign and the hope of an EU-wide fiscal stimulus in the second half of 2021.
The Brussels-based institution now forecasts a gross domestic product rate of 4.2% for the EU in 2021 and 4.4% for next year. In February, he said GDP would be 3.7% this year and 3.9% in 2022.
The outlook for the 19 euro-sharing countries has also improved. Growth is now estimated at 4.3% this year, down from 3.8% as expected in February. The European Central Bank said in March that GDP will reach 4% in the euro area this year.
“The shadow of Covid-19 is starting to dissipate from the European economy,” European Commissioner for Economic Affairs Paolo Gentiloni said in a statement, adding that “unprecedented tax support has been – and remains – essential to help European workers and businesses ”.
“And of course, maintaining the now strong pace of vaccinations in the EU will be crucial – for the health of our citizens as well as for our economies,” Gentiloni also said.
The latest forecast comes at an important time for many EU countries as they announce – or in some cases, implement – a lifting of Covid-19 restrictions.
These are just a few examples of how economies are opening up ahead of the summer season, when many tourism-dependent countries hope to attract more foreign visitors than last year.
Due to the high level of government support in the aftermath of the pandemic, the Commission expects the EU’s overall public debt-to-GDP ratio to peak at 94% this year, before declining slightly. ‘next year.
But, this number masks the individual image.
Greece’s public debt is expected to reach 209% this year, Italy’s to 160% and France’s to 117.4%.
The European Commission recognizes, however, that the outlook is uncertain.
“The risks surrounding the outlook are high and will remain so as long as the shadow of the Covid-19 pandemic hangs over the economy,” the institution said in a statement.
There are concerns about how the virus might mutate and the effectiveness of vaccines. But there are also concerns about how much consumers will be willing to spend in the coming months and when to roll back stimulus policies.
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