Brussels: The European economy will face a “deeper recession” than previously predicted due to the prolonged containment measures on the Covid-19 pandemic, the European Commission has said in its “Summer 2020 Economic Forecast”.
The 19-member eurozone economy is projected to contract by about 8.75 per cent in 2020 before recovering at an annual growth rate of 6 per cent next year, said the Commission on Tuesday, Xinhua reported.
The 27-member European Union (EU) economy is forecast to contract by 8.3 percent in 2020 and grow by 5.8 percent in 2021, it said.
Compared with the spring forecast published in May, the summer one’s projections on economic contraction in 2020 are somewhat dimmer and recovery in 2021 slower.
In its spring forecast, the Commission projected that the eurozone economy would contract by 7.75 per cent in 2020 and grow by 6.25 per cent in 2021, and the EU economy was forecast to contract by 7.5 per cent in 2020 and grow by around six per cent in 2021.
With a far longer period of disruption and lockdown taking place in the second quarter of 2020, economic output is expected to have contracted significantly more than in the first quarter, said the Commission.
Early figures for May and June have suggested that “the worst may have passed,” and recovery is expected to gain traction in the second half of the year, it added.