The European Commission is out with its latest quarterly economic projections, raising the Eurozone growth and inflation estimates for this year while warning about the risks posed by new variants of the coronavirus.
Key takeaways
Raises forecast for Eurozone GDP growth to 4.8% in 2021 from 4.3%, to 4.5% in 2022 from 4.4% seen in May.
Expects euro zone inflation at 1.9% in 2021, 1.4% in 2022.
Raises forecast for Germany’s GDP growth to 3.6% in 2021 from 3.4%, to 4.6% in 2022 from 4.1% seen in May.
Raises forecast for France’s GDP growth to 6.0% in 2021 from 5.7%, confirms estimate of 4.2% growth in 2022.
Raises forecast for Italy’s GDP growth to 5.0% in 2021 from 4.2% previously estimated, cuts forecasts for 2022 growth to 4.2% from 4.4%.
The large revision is largely due to the reopening of the bloc's national economies in the second quarter which benefited the services sector and is expected to boost tourism within the EU.”
We must redouble our vaccination efforts, building on the impressive progress made in recent months: the spread of the Delta variant is a stark reminder that we have not yet emerged from the shadow of the pandemic.
Market reaction
EUR/USD continues to trade choppy around 1.1825, little impressed by the upbeat EU Commission’s economic forecasts. The spot trades almost unchanged on the day.
