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According to the EC, a partial recovery is expected in 2021: GDP will grow 6.7%.
As in the spring, the EC predicts that a significant decrease in energy prices will lead to inflation of 0.8% this year, and due to the expected increase in oil prices and the recovery of aggregate demand in 2021. Inflation is expected to reach 1.5%.
The economic development scenario of the Ministry of Finance predicts that this year the Lithuanian economy will decrease by 7% due to the shock related to the crisis of the COVID-19 virus, and GDP will grow 5.9% in 2021. (In 2019 , stood at 3.9 percent). Later, GDP could grow 2.6% on average. by year.
Updated EC forecasts
The euro area is forecast at 8.7%. decrease
The euro area’s gross domestic product (GDP) will drop 8.7% in 2020, but will recover and grow 6.1% next year, the European Commission (EC) predicts.
These projections for the euro area are more pessimistic than those announced in early May.
“The economic impact of the quarantine is greater than previously expected. Looking towards this year and next, we can expect a recovery, but we must be alert to the change in the pace of recovery,” said Valdis Dombrovskis, Vice President of the European Commission.
The GDP of Germany, the largest economy in the EU, will fall 6.3%. this year and will grow 5.3 percent next year.
The economies of one of the largest countries in the eurozone, France, Italy and Spain, will contract by more than 10%.
The French economy will shrink 10.6 percent this year and grow 7.6 percent next year. Up to 11.2 percent is forecast for Italy. it will decrease this year and only 6.1 percent. recovery next year. Meanwhile, Spain’s GDP will fall 10.9 percent. this year and will recover 7.1 percent. next year.
“Policies in Europe have helped reduce the difficulties faced by citizens, but inequality and insecurity continue to grow. Therefore, it is essential to reach a quick agreement on the recovery plan proposed by the Commission. This would be an injection of confidence and financing in our economies at this critical moment, “said Paolo Gentiloni, European Commissioner for the Economy.
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