Eurozone boosts growth forecast despite new wave of COVID cases

Eurozone boosts growth forecast despite new wave of COVID cases

BRUSSELS: The EU increased its growth forecast for 2021 yesterday, as the eurozone economy holds strong against higher energy prices, supply chain bottlenecks and a fresh wave of COVID cases. The European Commission, the EU’s executive arm, predicted that the eurozone economy will expand by five percent, instead of 4.8 percent previously, and by the same amount across all the bloc’s 27 member states. The prediction for growth next year was brought slightly lower, to 4.5 percent, with a big slowdown seen for 2023, to a still strong 2.4 percent.

The commission insisted that its latest forecasts were marked by great uncertainty and that COVID-related risks could throw its upbeat outlook off course. “The recovery continues to be heavily dependent on the evolution of the pandemic, both within and outside the EU,” warned EU economic affairs commissioner Paolo Gentiloni. The commission also said that it expected inflation, a pressing concern worldwide, to peak at 2.6 percent this year before easing slightly next year.

Crucially, the commission proposed that inflation would fall to below target levels in 2023, backing the stance by the European Central Bank that current jumps in consumer prices will subside. Recent price jumps were “to a large extent linked