by Lee Kimin
Published 05 Nov.2020 21:40(KST)
[Asia Economy Reporter Ki-min Lee] As the novel coronavirus infection (COVID-19) resurges in Europe, expectations for economic recovery have sharply declined.
According to Bloomberg News on the 5th (local time), the EU Commission lowered its forecast for next year's Eurozone economic growth rate from the previous 6.1% to 4.2% in its autumn economic outlook.
This is because COVID-19 cases and deaths have surged again across Europe, leading Eurozone countries to reimpose lockdowns and implement new regulatory measures. Due to this, the EU Commission announced this year's Eurozone economic growth forecast at -7.8%.
By country, the weakness of Germany, Europe's largest economy and export manufacturing hub, was evident. Germany's 2021 economic growth rate is expected to be 3.5%, which is 0.7 percentage points lower than the Eurozone average. France and Italy's economic growth forecasts for next year were announced as 5.8% and 4.1%, respectively.
Valdis Dombrovskis, Vice President of the EU Commission, said, "Uncertainty is increasing due to the second wave of the pandemic, and hopes for a rebound have been dashed."
Although the EU showed a strong rebound with a 12.7% increase in gross domestic product (GDP) in the third quarter compared to the second quarter, Valdis Dombrovskis, Vice President of the EU Commission, expressed disappointment, saying, "Uncertainty is increasing due to the second wave of the pandemic, and hopes for a rapid rebound have been dashed." The EU Commission viewed next year's economic growth outlook as highly uncertain and predicted that the Eurozone economy would find it difficult to recover to last year's level even in 2022. The EU Commission's economic growth forecast for 2022 is 3.0%.
In response, Vice President Dombrovskis announced that the EU would implement extensive stimulus and economic support measures at the EU level, including providing €750 billion (approximately 998 trillion KRW) in loans and subsidies starting in 2021. The European Central Bank (ECB) is injecting €1.35 trillion (approximately 1,796 trillion KRW) into economic stimulus through regular bond purchases.
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