Experts no longer expect that in 2022 the economy will grow to a pre-pandemic level.
As Evgeny Redzyuk, an expert of the Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine, writes in his text for ZN.UA, in comparison with the economic forecast for summer 2020, the expectations for recovery of growth for both the euro zone and the EU have deteriorated. Now experts no longer expect that production in both the euro zone and the EU will recover to 2022 its pre-pandemic level.
“The economic impact of the pandemic varies greatly across the EU, and the same can be said about the prospects for recovery. According to the European Commission’s forecast, unemployment in the euro zone will increase from 7.5 percent 2019 to 8.3 in 2020 and 9.4 in 2021, and then decline to 8.9 percent 2022. The EU unemployment rate is forecast to increase from 6.7 percent 2019 to 7.7 in 2020 and 8.6 in 2021 and then decline to 8.0 percent 2022. The increase in the budget deficit will be very significant across the EU in 2020, as social spending increases and tax revenues fall. Forecasting a sharp increase in the deficit, we can expect the total debt-to-GDP ratio of the eurozone to increase from 85.9% of GDP in 2019 to 101.7% in 2020, 102.3% in 2021 and 102.6% in 2022”, – the report says.
This year’s inflation will lead to recession and economic decline in the EU countries. Inflation in the euro zone, which is measured by the harmonized consumer price index, is projected to average 0.3% in 2020, and then will increase to 1.1 – 2021 and 1.3% – 2022 as oil prices stabilize. For the EU, inflation is projected at 0.7 percent in 2020, 1.3 in 2021 and 1.5 percent in 2022.