The EU on Wednesday sharply revised its growth forecasts for this year and next, saying an accelerated vaccination drive and the bloc’s landmark recovery plan would lift Europe out of recession.
“Recovery is no longer a mirage. It is under way,” EU economic affairs commissioner Paolo Gentiloni told a media conference.
The pickup in growth confirms forecasts by the IMF and other data that showed an increase in manufacturing and greatly improved confidence by consumers who see a happy end to the long winter of Covid-related restrictions.
Europe also hopes to quiet criticism that it has fallen short in jumpstarting its economy compared to the US where the economic activity has already roared ahead on the back of major stimulus plans.
According to the European Commission, growth in the 19 countries that use the euro currency will hit 4.3 percent in 2021 and 4.4 percent in 2022, compared with 3.8 percent for these years in its previous estimate given in February.
For the full 27 members of the EU, the commission said the economy will expand by 4.2 percent in 2021 and by 4.4 percent in 2022.
“The shadow of Covid-19 is beginning to lift from Europe’s economy,” Gentiloni said, though he cautioned that “the risks of a scarring effect remains real”.
If the growth is confirmed, the European economy will have sped out of a second recession in less than year, after a slow rollout of Covid vaccines stymied a first economic recovery in the winter of 2020-21.
It would still be trailing the other two biggest economies in the world, however. The United States is forecast to reach growth of seven percent this year — its fastest pace since the 1980s — and China is looking similarly buoyant.