The European Commission, the EU’s executive arm, slashed its 2020 and 2021 projections on Tuesday as the coronavirus pandemic takes its toll on the 27 member states.
The Brussels-based institution expects the 27-member region to contract by 8.3% this year, followed by a rebound of 5.8% in 2021. In May, the Commission estimated a 7.4% contraction for total GDP across the region this year, with a rebound of 6.1% in 2021.
“The economic impact of the lockdown is more severe than we initially expected. We continue to navigate in stormy waters and face many risks, including another major wave of infections,” Valdis Dombrovskis, vice-president of the European Commission, said in a statement Tuesday.
The outlook has worsened over the last two months irrespective of the steps that most European countries have taken to reopen their economies.
The Commission said Tuesday that economic activity is expected to pick up in the second half of the year, though it will remain “incomplete” and “uneven” on the back of social-distancing measures.
