The EC is launching a spring 2021 economic forecast

The spring 2021 economic forecast projects the EU economy to grow by 4.2% in 2021 and by 4.4% in 2022. Economic growth in the eurozone is forecast to be 4.3% this year and 4.4% next year. This is a significant improvement on the growth outlook compared to the 2021 winter economic forecast presented by the Commission in February. Growth rates in the EU will continue to vary, but by the end of 2022 the economy in all Member States is expected to return to pre-crisis levels.

Valdis Dombrovskis, Vice-President of the European Commission, on the EU and Latvia: “Due to the pandemic, the Latvian economy shrank by 3.6% last year. Service sectors related to on-site services were the most affected. At the beginning of 2021, the still high morbidity rates of Covid-19 and restrictive measures slowed down the economic recovery both in Latvia and in Europe as a whole. As the epidemiological situation improves, faster economic growth is expected in the second half of the year and the Latvian economy is forecast to grow by 3.5% in 2021. With consumption returning to previous levels, increased investment will provide additional stimulus to the economy, thanks in part to a significant inflow of EU funding. In this context, it is important that Latvia makes effective use of the available resources of the European Economic Recovery Plan. In the European Union as a whole, an economic decline of 6.1% was observed in 2020, but economic growth of 4.2% is expected this year. This year, Latvia's state support for entrepreneurs and households has increased significantly compared to 2020. The budget deficit is growing accordingly. In 2020, the budget deficit reached 4.5% of GDP, but this year it is already forecasted at 7.3%. ”

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