The European Commission now has turned more pessimistic on its prediction for the economy of the euro zone, showcasing a decreased growth for the 19-member region this year as the government fights with new coronavirus variants.
The institution, based in Brussels, expects the region to expand by 3.8 per cent in 2021. Back in November, it forecasted a 4.1 per cent GDP rate for the present year.
The recent forecasts come during a tricky time period for European Union, with its coronavirus vaccine rollout facing problems around manufacturing and supply. Besides, the European governments presently are concerned about the coronavirus mutations that are believed to be contagious. More the health emergency continues, more the EU nations will have to extend lockdowns and social restrictions, which affects the economy drastically.
The forecasts of the European Commission assume that the social restrictions would be a little eased during Q2 of this year; however there will be a few sectoral steps in place still the following year.
Meanwhile, the European Commission believes that the GDP in 2022 in euro region will reach 3.8 per cent, having projected one 3 per cent GDP rate for 2022 in November.
Talking about individual nations, Germany has shown a growth of 3.2 per cent this year, having contracted around 5 per cent last year. On the other hand, France is likely to witness a 5.5 per cent GDP rate this year, post falling over 8 per cent last year.