The International Monetary Fund (IMF) predicts that Europe’s economy will not be able to return to its pre-crisis levels this year.
The latest outlook for the European economy provided by the IMF turned out to be rather dismal. The virus-stricken economy of the region is expected to rebound to its pre-crisis levels only in 2022. By the end of the current year, GDP growth is projected at 4.5%, which is 0.2 percentage points lower than the previous forecast. The reason for such a downward revision was new restrictions in a number of European countries amid a surge in coronavirus cases. The latest round of lockdowns does not allow individual European economies as well as the entire European Union to expand, thus delaying the hoped-for recovery.
The IMF’s scenario assumes that Europe will speed up its vaccination campaign as early as this summer. In case of a slower vaccination rollout, its forecast will be revised down again. According to experts, inflation in the European Union is anticipated to edge up by 1.1% to 3.1% by the end of 2021, which will promote economic growth. In turn, the European Central Bank expects inflation to end the fourth quarter of the year at around 2%, which is in line with the target level.
