Eurozone growth outlook brightens despite Covid threat

The EU increased its growth forecast for 2021 on Thursday, 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 per cent, with a big slowdown seen for 2023, to a still strong 2.4 per cent.

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.