The first data are bleak: the pandemic is slowing the economy. But how deep does it go down and when does it go up again? A spring forecast from Brussels is likely to be very uncertain.
Brussels (dpa) - In the middle of the severe corona economic crisis, the EU Commission today presents its economic forecast.
It is expected to make assumptions about gross domestic product, inflation and unemployment in the euro area and throughout the European Union. EU Economic Commissioner Paolo Gentiloni will present the numbers.
Dramatic forecasts are piling up as factories shut down for weeks, world trade was restricted and stores closed due to corona restrictions. The ECB warned of a slump in the eurozone economy by up to 15 percent. Commission vice-president Valdis Dombrovskis said recently that a decrease of five to ten percent is expected for the EU as a whole. According to Social Commissioner Nicolas Schmit, there is also a fear of a drastic rise in unemployment.
The federal government has already presented the spring forecast for Germany 2020, and it too is bleak. In the largest economy in the EU, gross domestic product is expected to decline by 6.3 percent this year. Next year it should go up again steeply.
The figures for the first quarter are actually extremely bad. According to data from the EU statistics agency Eurostat, economic output in the euro zone fell by 3.8 percent in the first three months. It has been the sharpest decline in the currency area since the beginning of the 1995 surveys. The worst hit was France, the second largest economy in the euro area. Here, economic output shrank by 5.8 percent compared to the previous quarter. Italy and Spain are also suffering enormously from the pandemic and its consequences.
With huge sums, the EU and its member states are trying to keep the economy going and people at work. According to the EU Commission, there have been a total of 3.4 trillion euros in aid and guarantees. A reconstruction program is now under discussion, which should mobilize a trillion euros for investments after the crisis. However, details are controversial. EU Commission chief Ursula von der Leyen is expected to present a consensual plan by mid-May.