Maarten Verwey, João Leal, Przemyslaw Wozniak, 18 February 2022

Intensified headwinds softened the EU’s growth momentum around the turn of the year. The European Commission’s Winter 2022 Forecast expects that as these headwinds gradually fade, the expansion of the European economy will regain pace in the second quarter and remain robust until 2023. Following a strong rebound in 2021, growth in the EU is now forecast at 4.0% in 2022 (down from 4.3% in the Autumn Forecast) and 2.8% in 2023. The euro area inflation forecast for 2022 is revised up on the expectation that energy prices will stay high for longer. Inflation is expected to return to just below 2% in 2023. 

Maarten Verwey, Oliver Dieckmann, Przemyslaw Wozniak, 16 November 2021

The Covid-19 pandemic is not over, but due to increasing vaccination rates and an improving health situation, since spring many restrictions in the EU have been gradually eased and this ‘reopening’ has fuelled economic growth more than expected. Supported by monetary and fiscal policy, the foundations are in place for sustaining growth. However, headwinds come from supply-demand imbalances and higher energy prices. In its Autumn 2021 Forecast, the European Commission expects GDP in the EU and the euro area to grow in 2021 by 5%, in 2022 by 4¼%, and in 2023 by 2½%. The inflation forecast for all three years has been revised up with rates above 2% in 2021 and 2022, but with declines from early 2022 onwards.

Maarten Verwey, Björn Döhring, 07 July 2020

Forecasters agree that the economic fallout from COVID-19 has caused the sharpest drop in economic activity in Europe and globally since WWII. Just how deep the drop of activity was in the second quarter, which sectors were most strongly affected by containment measures, and how swift the rebound will be as they are gradually lifted is still very uncertain. This column describes how the European Commission’s Summer 2020 interim European Economic Forecast now estimates a deeper drop of output in the second quarter of the current year than was anticipated earlier. The recovery is also now expected to be less swift than was projected in Spring, with differences across Member States set to be more pronounced. Minimising hysteresis and avoiding persistent economic divergences within the EU and euro area requires the rapid agreement and deployment of common support measures at the EU level. The risk otherwise is of significant distortions to the internal market and of even deeper divergences between countries that could ultimately threaten the smooth functioning of the monetary union. 


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