EU predicts ‘historic’ recession

The European Union (EU) is predicting “a recession of historic proportions” this year as the continent begins to recover from the coronavirus pandemic, which has halted countries’ economies. 

In its spring economic forecast, the 27-nation EU predicted a 7.5 percent economic contraction this year, followed by 6 percent growth in 2021. Among the 19 nations that use the euro as their currency, the EU predicts a decline of 7.75 percent this year, followed by growth of 6.25 percent next year

In February, the EU had predicted “a path of steady, moderate growth” of 1.2 percent this year and in 2021. At the time, the commission was most concerned with drafting a Brexit trade deal among other matters of foreign relations. 

“Europe is experiencing an economic shock without precedent since the Great Depression,” European Commissioner for the Economy Paolo Gentiloni said in a statement Wednesday. “Both the depth of the recession and the strength of recovery will be uneven, conditioned by the speed at which lockdowns can be lifted, the importance of services like tourism in each economy and by each country’s financial resources.”

The EU predicts consumer prices will fall significantly this year due to the drop in demand and the steep fall in oil prices. 

More than 1.1 million people have tested positive for the virus across Europe and more than 137,000 have died, according to the European Centre for Disease Prevention and Control.