The Strategist

EC: Eurozone GDP decline may reach 7.5% in 2020

04/28/2020 - 03:06

Decline in the eurozone economy due to the fight against the pandemic of the new coronavirus this year may be close to the figure previously expected by the International Monetary Fund (IMF), that is, 7.5%, said European Commissioner for Economics Paolo Gentiloni, speaking at a meeting of the profile committee of the European Parliament.

"It is clear that a deep recession is inevitable in Europe this year. We will present our spring forecast on May 7... We will have a very strong decline in EU GDP in 2020, worse than that during the global financial crisis. Our numbers will be similar in magnitude to the latest IMF estimates, which predicted a 7.5% drop in Eurozone GDP," he said.

The Eurozone, consisting of 19 states, is the economic core of the European Union. All countries of the currency block are included in the EU.

In the middle of the month, the IMF predicted a 7.5% drop in Eurozone GDP due to coronavirus by the end of the year, although in January it expected its growth to be 1.3%. At the same time, the basic scenario of the fund implies recovery in 2021, and the economy of the countries of the monetary union will grow by 4.7%, the IMF believes. This is 3.3 percentage points higher than its January forecast.

The World Health Organization on March 11 declared a pandemic due to an outbreak of a new coronavirus infection COVID-19. According to the latest WHO data, more than 2.8 million cases of infection have been recorded in the world, over 193 thousand people died.

Against the backdrop of the pandemic, many states of the world, including the EU, have introduced large-scale bans on social and economic life, including trade restrictions, a ban on the operation of restaurants and hotels, border closures, and restrictions on air and ground communications. The economy is seriously affected by this situation.


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