This year, the European Union's economy will grow at its fastest pace in decades, fueled by strong demand both domestically and globally, as well as a faster-than-expected recovery in the services sector. Paolo Gentiloni, Commissioner for Economic Affairs of the European Commission, spoke about this.
“We are raising our 2021 growth forecast by 0.6 percentage points. This is the largest upward revision we have made in more than 10 years and is in line with company confidence, which has reached a record high in recent months, ”said Paolo Gentiloni.
According to the interim economic forecast for the summer of 2021, the EU and Eurozone economies will grow 4.8% this year and 4.5% in 2022. Compared to the previous forecast in the spring, the growth rate for 2021 is expected to be significantly higher. in the EU (+0.6 pp) and the euro area (+0.5 pp), while for 2022 it is slightly higher in both regions (+0.1 pp). Real GDP is projected to return to pre-crisis levels in the last quarter of 2021 in both the EU and the euro area.
Growth is expected to be boosted by several factors. First, activity in the first quarter of the year exceeded expectations. Second, effective virus containment strategies and progress in vaccinations have led to a decline in new infections and hospitalizations, which in turn has allowed EU member states to reopen their economies in the next quarter.
Private consumption and investment are expected to be the main drivers of growth, supported by employment, which is expected to move in tandem with economic activity. The strong growth of the EU's main trading partners should benefit the export of EU goods, while the export of services will suffer from continuing restrictions on international tourism.