Reuters reports that the European Commission forecast that the euro zone economy will grow faster than previously expected this year as it recovers from the pandemic-induced recession.
The Commission said that eurozone GDP would grow 5.0% this year after a 6.4% recession in 2020. It forecast growth of 4.3% in 2022 and 2.4% in 2023. Its forecast in May for 2021 growth was only 4.3%.
The Commission said inflation would reach 2.4% in 2021, up from 0.3% in 2020, before slowing to 2.2% in 2022 and 1.4 in 2023. The peak in price increases is to come in the last four months of this year, and then slow gradually throughout 2022.
The fast growth and the gradual withdrawal of emergency government support for the economy will help reduce the aggregate budget deficit of the euro zone to 7.1% of GDP this year from 7.2% in 2020 and then to 3.9% in 2022 and 2.4% in 2023, the Commission forecast.