As the economy contracts this year, consumer prices will almost stagnate, the Commission forecast. The inflation rate will slow to 0.2% in 2020, before accelerating to 1.1% next year, when the euro zone is to return to growth of 6.3%. Investment will plunge 13.3% this year, it said.
With government spending the main fuel for the economy, the effort to keep economies alive will widen budget gaps in the euro zone to an aggregate 8.5% of GDP this year from 0.6% last year, before the deficit shrinks again to 3.5% in 2021. “Proposals for the next EU budget – which will encompass a recovery fund – are still being drafted. The details, particularly on size and breakdown of loans/grants, will be key,” the bank said.
FILE PHOTO: European Union flags fly outside the European Commission headquarters in Brussels, Belgium, February 19, 2020. Picture taken February 19, 2020 REUTERS/Yves Herman
No really?
You dont say
'The euro zone economy will contract by a record 7.7% this year because of the COVID-19 pandemic, inflation will almost disappear and public debt and budget deficits will balloon...' 🙏🏾 as always the EC stating the obvious by any EU person and realize the catastrophe at hand
Great!
Es cierto.pero la prioridad es Coronavirus/Wuhan/Jixinping/Trump Que es infinita por ahora......
What brilliant economic insight these guys have. Give em a raise!
Think I’ll take the under on Eurozone GDP decline.
God was so angry that he flooded the world with debt and money. Better find an Ark.
Communist China will contract by a record % too.
The same will happen in the U.S. but we'll give tax breaks to billionaires and increase our military spending to solve the problem.
I wonder, could this all be solved quickly, if wealth inequality between generations were reset to where it was 30 years ago? Wouldn't that lead to young people starting up new businesses, pushing new ideas into the market, building rather than consuming, creating a new world?
You are doing a very good job ... Hiding the real news from the US economy, even before the pandemic started ... Company debt, student debt, m2 aggregate, unbalanced economy, over dependent on consumption, over dependent on obtaining essential goods from abroad ...
And the damage this can cause, may be greater than the one, caused by the virus itself. Strong fiscal stimulus and cash injection must be introduced ASAP but as integrated EU program otherwise cross EU inequalities can tip over common market.
The truth will be more double digit high...
FREE CHEDDAR FLOWWW JUST FOLLOW!!!!
'Europe is experiencing an economic shock without precedent since the Great Depression,' - yet they believe govt spending and higher debt levels is the solution.