The European Commission in 2020 expects the eurozone GDP to fall by a record 7.7%, according to a spring forecast presented in Brussels on Wednesday, May 6, Deutsche Welle reports.

“Europe is experiencing an economic shock, which has not happened since the Great Depression,” said European Commissioner for Economics, former Prime Minister of Italy Paolo Gentiloni.

According to the forecasts of the European Commission, the volume of gross domestic product in 27 EU countries in 2020 will decrease by 7.4%, and in 2021 it will grow by about 6%. The EU unemployment rate is expected to rise from 6.7% in 2019 to 9% in 2020. A year later, according to the European Commission, it will decline slightly, stopping at around 8%. It will be especially difficult for young people who have to find their first job, experts say.

Also, the EU Commission expects an increase in budget deficits, as EU countries spend billions of euros to counter the crisis caused by the coronavirus pandemic. The total cost of the state deficit of all EU countries in 2019 was about 0.6% of GDP. It is expected that in 2020 it will grow to 8.5% with a subsequent decrease to 3.5%.

The European Commissioner believes that the pace of economic recovery will depend on the pace of lifting quarantine restrictions, the dependence of the economy on tourism and the financial possibilities of the budget. He noted that the forecast is based on the fact that EU countries will begin to gradually weaken quarantine measures in May. If the fight against the pandemic takes a longer time and requires even more serious investments, this may lead to an even greater decline in economic indicators.

Earlier it was reported that the European Central Bank warns of a reduction in GDP due to the coronavirus pandemic. Read more in an interview with Julia Samaeva with JP Morgan analyst David Stubbs “We never know exactly where the bottom is. “

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Kiranpreet Kaur
Staff writer at The Eastern Herald. Studied political science.