The European Commission published its Spring economic forecast on 6 May, the first one to fully consider the impact of COVID-19. It provides a forecast at European level, for EU countries, candidate countries and certain other non-EU countries. It concludes that the impact of COVID-19 will affect all countries, even if at different levels. The same is the case for the speed of the recovery expected in 2021. Below the key indicators for the EU and Euro area.
- The Euro area economy will contract by 7.75% in 2020 and grow by 6,25% in 2021. The EU economy is forecast to contract by 7.5% in 2020 and grow by around 6% in 2021.
- The unemployment rate in the Euro area will rise from 7.5% in 2019 to 9.5% in 2020 before reducing to 8.5% in 2021. In the EU, it will rise from 6.7% in 2019 to 9% in 2020 and then reduce to around 8% in 2021.
- Inflation in the Euro area (measured by the Harmonised Index of Consumer Prices), is forecast at 0.2% in 2020 and 1.1% in 2021. For the EU, inflation is forecast at 0.6% in 2020 and 1.3% in 2021.
The forecast is based on a set of assumptions about the evolution of the coronavirus pandemic and containment measures. It assumes that restrictions will be gradually lifted from May. The full forecast and country-specific information can be found here.