EU doesn't expect the economy to reach pre-pandemic level of GDP before 2023

The Autumn 2020 Economic Forecast projects that the EU economy will contract by 7.4% in 2020 before recovering with growth of 4.1% in 2021 and 3% in 2022. Compared to the  summer forecast, growth projections for both the euro area and the EU are slightly higher for 2020 and lower for 2021. Output in both the euro area and the EU is not expected to recover its pre-pandemic level in 2022.

Paolo Gentiloni, Commissioner for Economy, said: “After the deepest recession in EU history in the first half of this year and a very strong upswing in the summer, Europe's rebound has been interrupted due to the resurgence in COVID-19 cases. Growth will return in 2021 but it will be two years until the European economy comes close to regaining its pre-pandemic level. In the current context of very high uncertainty, national economic and fiscal policies must remain supportive, while NextGenerationEU must be finalised this year and effectively rolled out in the first half of 2021.”

The economic impact of the pandemic has differed widely across the EU and the same is true of recovery prospects. This reflects the spread of the virus, the stringency of public health measures taken to contain it, the sectoral composition of national economies - especially dependency on tourism - and the strength of national policy responses.

"In the current context of very high uncertainty, national economic and fiscal policies must remain supportive, while NextGenerationEU must be finalised this year and effectively rolled out in the first half of 2021." - Commissioner @PaoloGentiloni pic.twitter.com/ah4DdBota9

— EU Economy & Finance (@ecfin) November 5, 2020

The European Commission prepared its Autumn economic forecast in the face of severe uncertainty, and with states announcing major new public health measures to limit the spread of the virus.

Valdis Dombrovskis, Executive Vice-President for an Economy, said: “This forecast comes as a second wave of the pandemic is unleashing yet more uncertainty and dashing our hopes for a quick rebound. EU economic output will not return to pre-pandemic levels by 2022."

"We agreed a landmark recovery package, NextGenerationEU - with the Recovery and Resilience Facility at its heart - to provide massive support to worst-hit regions and sectors. I now call again on the European Parliament and Council to wrap up negotiations quickly for money to start flowing in 2021 so that we can invest, reform and rebuild together.”

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