As the new surge of COVID-19 infections dominates the European Union (EU), the European Commission has warned that a return of the economy to pre-pandemic normalcy might not happen until 2023.
Sharing the new projections made by the body, EU’s economic affairs commissioner Paolo Gentiloni updated the media that “The rebound has been interrupted,” asserting that the new wave of infections nullified any positive recovery which was happening gradually in the last quarter or so.
The new grim outlook dampened any hopes of a quick turnaround of the European market and raised apprehensions about whether more stimulus would be needed to avert more lasting damage.
“We never counted on a V-shaped recovery. Now we know for sure that we won’t have one,” Mr. Gentiloni stated.
The new forecast pointed to a whole series of danger signs, including higher unemployment and soaring debt levels for countries that will need to keep spending to revive their economies.
Revised projections by the European Commission now expect the eurozone economy would expand by just 4.2 percent next year, compared to 6.1 percent it predicted in July.
In effect, renewed disruptions across the continent will “put the recovery on hold in the short term”, the EU official said, while adding that the outlook was subject to “extremely high uncertainty”.
The body stated that the combined economy of its 19 member nations would see a decline at -7.8 percent in 2020 compared to the -8.7 it had predicted earlier.
Meanwhile, Europen Commission Vice President Valdis Dombrovskis observed that the economic output from the region “will not return to pre-pandemic levels by 2022.”
