EU forecasts deeper economic hit from pandemic

EU economy is predicted to contract by 8.3% this year

The European Union's executive forecasts that the bloc's economy will contract more than previously expected because of the coronavirus pandemic, which has caused lockdowns on business and public life that are only slowly being eased.

Continue Reading Below

The 27-nation EU economy is predicted to contract by 8.3% this year, before growing 5.8% in 2021, according to the latest predictions released Tuesday.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

“The road to recovery is still paved with uncertainty," EU Economy Commissioner Paolo Gentiloni told reporters in Brussels.

In the previous forecasts released in May, when most of the continent was under lockdown, the bloc’s GDP was forecast to contract by about 7.5% this year, and to bounce back by 6% in 2021.

EU WILL STAND FIRM AGAINST WASHINGTON OVER TRADE DISPUTES, SAYS COMMISSIONER

The European Commission said the impact on economic activity in 2020 will be worse than expected because “the lifting of lockdown measures is proceeding at a more gradual pace than assumed in our Spring forecast."

CLICK HERE TO READ MORE ON FOX BUSINESS

The group of 19 EU nations that use the euro as their currency will see a record decline of 8.7% this year, and grow by 6.1% in 2021, the European Commission said in its updated predictions, called the Summer forecast. In May it had forecast a 7.8% decline this year, and growth of 6.3% in 2021.