The Macroeconomic Environment in the EU
The COVID-19 pandemic, along with the high inflation rate and the steady increases in interest rates, puts the EU at risk of slipping into its worst recession in history. Economic growth is picking up thanks to bold and innovative policy responses, including a common instrument to fund the National Recovery Plan (Next Generation EU) as well as the transition to green and digital.
The COVID-19 pandemic forced most eurozone economies into repeated lockdowns in 2020 and early 2021, with the eurozone slipping into its deepest recession in 2020. Politicians responded swiftly and comprehensively to this crisis.
Source: Eurostat
After a strong recovery in 2021, real GDP is expected to grow by 2.6% in 2022 and 1.6% in 2023. The war in Ukraine and the lockdown in China slowed growth significantly in the first half of 2022. With these factors, inflation will continue to rise and is projected to hit 7% this year. This puts pressure on household consumption and increases uncertainty.
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Source: Created by Infocredit Group for FEBIS
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