EU expects over 4% economic growth this year

By Agnes Szucs

BRUSSELS (AA) – The EU economy is expected to grow over 4% in 2021 and 2022, according to the European Commission’s spring economic forecast published on Wednesday.

The EU economy would expand by 4.2% this year and 4.4% in 2022, the EU executive body’s estimates showed.

EU member states are expected to catch up by different growth years, but the European Commission assumes that all countries would reach the pre-crisis level of economic output by the end of next year.

This year, the highest GDP growths are foreseen in France and Spain, by 5.9% and 5.7%, respectively.

The favorable projections are due to the acceleration of vaccinations and easing of restrictions across the bloc.

But unemployment is supposed to stay higher than it was before the outbreak of the COVID-19 pandemic, with a rate of 7.6% in 2021 and 7% in 2022.

Greece and Spain are expected to face the highest unemployment rates in the bloc this year, with 16.3% and 15.7% of people without jobs.

Because of the increased state spending in supporting businesses and families, budget deficit and public debt are forecast to stay high.

On average, EU governments would see a 7.5% budget deficit this year but may manage to reduce it to 3.7% in 2022.

The EU's average public debt is expected to peak at 94% in 2021 before slightly dropping to 93% next year.

Malta and Italy are forecast to see the highest budget deficit this year, 11.8% and 11.7% respectively, while Greece and Italy need to deal with the highest public debt ratios of 208.8% and 159.8%.