The euro area economy is forecast to recover at a slower-than-expected pace this year, as the resurgence of the Covid-19 infections, together with more contagious variants of the virus forced many economies to tighten containment measures, the European Commission said in its interim Winter forecast, released Thursday.

The currency bloc is expected to grow 3.8 percent this year, instead of 4.2 percent projected in the autumn forecast. However, the outlook for 2022 was lifted to 3.8 percent from 3 percent citing the start of mass vaccination campaigns.

“Today’s forecast provides real hope at a time of great uncertainty for us all,” Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People said. “The solid expected pick-up of growth in the second half of this year shows very clearly that we are turning the corner in overcoming this crisis.”

The EU cautioned that projections are subject to significant uncertainty and elevated risks, predominately linked to the evolution of the pandemic and the success of vaccination campaigns.

The economic impact of the pandemic remains uneven across member states and the speed of the recovery was also projected to vary significantly.

Germany’s real GDP is forecast to rebound by 3.2 percent in 2021, returning to its pre-crisis level at the turn of the year. In 2022, the economy should continue growing by 3.1 percent, the EU said.

France’s real GDP is projected to expand by 5.5 percent in 2021 and by 4.4 percent in 2022.

Italy’s GDP is projected to expand by 3.4 percent in 2021. Real output is set to grow at almost similar pace in 2022 on the back of the momentum gained in the second half of this year on the back of continued recovery of the services sector.

Spain’s GDP is forecast to grow by 5.6 percent in 2021. In 2022, driven by the tourism recovery, the region is set to expand 5.3 percent.

The European Union is forecast to rebound 3.7 percent this year, before advancing 3.9 percent in 2022.

Inflation in the euro area is expected to be slightly higher in 2021 compared to last autumn, but to remain subdued despite a temporary boost from base effects, EU said.

Inflation is seen at 1.4 percent in 2021, up from the prior forecast of 1.1 percent. As supply side adjusts and base effects taper out, inflation is projected to moderate to 1.3 percent in 2022, which was unchanged from the prior forecast.

The material has been provided by InstaForex Company – www.instaforex.com

Leave your vote

🚀If you want to get a Forex Robot Coded as per your trading strategy but are unable to do so because of the high price for the Robot then you can take advantage of the CROWD FUNDING campaigns feature. ✔ These are some crowd funding campaigns for Forex Robots, which when completed can provide the very same Forex Robot to the participants at an average price of $5-$10 per participant. ✔ You either participate in one of the already listed campaigns or send us your Forex strategy : Submit Crowd Funding Campaign , for which you would like the Forex Robot to be coded. A Crowd Funding Campaign would then be started for the same . ✔ All you have to do later on is to share the campaign online with your friends to encourage more people to participate in the campaign.

As a result, each participant can get that Forex robot for just a campaign contribution of $5 (which is the minimum). Participants can back the campaign by anything above or equal to $5 to reach the funding goal to close the campaign.