World’s Epidemic COVID-19 – What is the threat from expert forecasts

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European Commission shared a new forecast

What threatens the world from the COVID-19 epidemic. Photo: newsweek.com

The European Commission’s (EC) new economic forecast, released on Wednesday, promises a “recession of historical proportions” in 2020.


Paolo Gentiloni
European Commissioner for Economics

According to the politician, “Such differences pose a threat to the single market and the euro area, but joint and decisive action at the European level may allow it to be mitigated.”

Gentiloni presented the European Commission’s analysis at a press conference in Brussels on Wednesday Six major conclusionsBased on the latest forecast.

1. According to the politician, “It is now entirely clear that the European Union has entered the deepest economic recession in its history.”

The EU economy is generally expected to contract for a record 7.4% this year and the euro area by 7.7%. The expert said this is higher than in 2009, when the decrease was around 4.5%. “In 2021, we expect a discount of 6.1% in the European Union and 6.3% in the euro area. This is not enough to fully compensate for this year’s loss, ”said Gentiloni.

2. Recession and recovery will be uneven. The overall figures for the European Union and the Eurozone hide significant differences between countries.

3. Inflation will also be very weak. The European Commissioner pointed out, “A huge drop in consumer prices is expected this year, reflecting a sharp drop in demand and a steep drop in oil prices.”

4. Unemployment will increase, although policies will try to limit its growth. Gentiloni warned, “The impact of the epidemic will be felt in the labor market, ending the ten-year period of reform.”

5. Decisive and necessary political measures “will lead to state deficits and an increase in public debt in 2020.” States’ response to the epidemic as fiscal measures aimed at limiting social and economic damage will inevitably lead to a noticeable decline in public finances in all member states this year, the European Commission concludes.

6. Gentiloni pointed out the risks of the immediate economic outlook due to the fact that economic activity in the European Union fell by almost a third. This setback caused many setbacks in demand, supply, industrial production, investment, trade and capital flows.


Paolo Gentiloni
European Commissioner for Economics

However, given the severe economic consequences of this year, the EU economy is not projected to fully compensate for these losses at the end of 2021. At the end of next year the volume of production will be about 3% lower than the European Commission’s latest autumn forecast.

Answering the question why the European Commission has chosen three developed people Economic development scenario Most optimistic, Gentiloni said that he would call it basic.


Paolo Gentiloni
European Commissioner for Economics

One of the two more negative scenarios is based on the fact that a second wave of infection will follow and EU states will return to isolation, and another on the fact that there will be a real re-epidemic in autumn or winter, leading to Stricter measures will again be required.

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Earlier we wrote that more than 26 million people lost their jobs during the quarantine period in the United States, and the country’s GDP plummeted by 4.8% for the first quarter. Prior to the coronary crisis, it was expected that the US economy would grow by 2% in 2020. Apart from the economic downturn, business activity and consumer sentiment is also deteriorating rapidly in the country.

It is noted that in the second quarter of 2020, the decline may be even more significant, as the January – March data do not, in fact, take into account the results of the quarantine initiated due to the proliferation of COVID-19. Some experts say that by July, the decline may increase to 30%. In addition to the United States, a contraction in the economy is also observed in Europe. Therefore, in Germany – the country with the strongest economies in the region – this year, GDP may decline by 6.3%.

Read: Cabinet called an unexpected plus quarantine: how Ukraine will save billions

According to the material interfax.com.ua


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