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Following the outbreak of Coronavirus (COVID-19) in early 2020, European economies are contracting pessimistic economic forecasts. The original anticipated of a -7.4 percent decrease has been revalued to an -8.3 percent.
The European Commission refreshed its prediction from the Summer Forecast on July 7, reporting an even lower outlook for the current year’s European economy. Additionally, the second wave of coronavirus infections has spread throughout the continent, reported with over 6.3 million cases in the area.
“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. If anything, this forecast is a powerful illustration of why we need a deal on our ambitious recovery package, NextGenerationEU, to help the economy.”Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People
Compared to the assumed contraction in Spring Forecast, the lifting of lockdown measures is advancing into a progressive pace. The impact on the 2020 economic activity is more abundant than predicted.
He also mentioned that the organization has been expecting a rebound this year or the following. Still, the need to be vigilant about the differing pace of the recovery is a must. Companies and workers ought to closely coordinate policies at the EU level to ensure a more vital and united economy.
According to Paolo Gentiloni, commissioner for the economy, Europe’s policy response encouraged the cushion of the citizens’ blow. Still, it is considered as a narrative of increasing divergence, inequality, and insecurity.
“Coronavirus has now claimed the lives of more than half a million people worldwide, a number still rising by the day – in some parts of the world at an alarming rate. And this forecast shows the devastating economic effects of that pandemic… This is why it is so important to reach a swift agreement on the recovery plan proposed by the Commission – to inject both new confidence and new financing into our economies at this critical time.”Paolo Gentiloni
Meanwhile, France has also reported a warning of economic rebound post-lockdown would likely fall plateau in the fourth quarter. France has the second-highest number of COVID-19 cases following Spain, according to JHU. Besides, Coronavirus heavily impacted business activities. On the other hand, Germany, Europe’s largest economy, has lifted restrictions in major cities.