EU forecasts 7.4pc GDP contraction in 2020
The EU and eurozone economies will contract at record rates this year, according to the latest projection from the European Commission.
It sees real gross domestic product (GDP) in the EU27 contracting by 7.4pc. For the eurozone this contraction is 7.7pc, broadly in line with the most recent forecast from the IMF.
The commission then sees inflation-adjusted EU GDP growth of 6.1pc in 2021.
The commission noted variations across the EU27 because of the degrees to which the Covid-19 pandemic has affected different countries and because of the relative strengths and weaknesses of member states' economies. Greece (-9.7pc), Italy (-9.5.pc) and Spain (-9.4pc) perform worse than Austria (-5.5pc) and Poland (-4.3pc). It said the EU's largest economy, Germany, faces a 6.5pc GDP cut, and France faces an 8.2pc cut.
The commission calculates a GDP cut of 8.3pc in the UK, based on an assumption of retained trading relations.
The commission makes its forecast on the basis of "benign" assumptions, notably that Covid-19 containment measures are gradually lifted, that the pandemic remains under control, and that national and EU monetary and fiscal measures are effective in boosting the economy.
The commission assumes oil prices picking up only "moderately" during the rest of this year to levels around 50pc below their 2019 average. Given this, the commission revised down its forecasts for harmonised consumer price index (HCPI) inflation in the eurozone to 0.2pc this year. It then forecasts a rise to 1.1pc in 2021.
The commission said that a more severe and longer-lasting pandemic could cause a far greater GDP cut than assumed in its baseline scenario.
By Dafydd ab Iago
source: Argus Media
Top News
Six last month
MinRes halts Bald Hill mine amid lithium price rout
Iran Alloy Steel Company intends to purchase 150 tons of Low-Carbon Ferro Manganese through public tender
Gold price faces worst week since 2021 as Fed signals no rate-cut rush
Iran Alloy Steel Company intends to purchase 12 tons of ferrotungsten through public tender
Swapping aluminum for copper will maintain China’s resources, group says
Gold loses some luster after Trump’s decisive win
Hedge funds slash bullish wagers on gold over Trump election win
Iron ore price flirts with key $100/t level on firm demand, China stimulus hopes
Families gather at South African mine shaft where hundreds are feared stuck underground
BHP to spend up to $14 billion on Chilean copper expansion
Chile’s rare salt flat fish faces threat from lithium mining project
British Columbia creates new mining ministry to tackle critical minerals amid doubts over capacity
China’s germanium, gallium ban could cost the US $3.4 billion
South Africa police standoff with illegal gold miners escalates
Iran Alloy Steel Company intends to purchase 150 tons of Low-Carbon Ferro Manganese through public tender
Iran Alloy Steel Company intends to purchase 12 tons of ferrotungsten through public tender
Iron ore price flirts with key $100/t level on firm demand, China stimulus hopes
Newmont sells Ontario gold mine to Orla for $850 million
BHP warns Australian mining not ready for low-cost competitors
Iran Alloy Steel Company intends to purchase 12 tons of ferrotungsten through public tender
Iran Alloy Steel Company intends to purchase 150 tons of Low-Carbon Ferro Manganese through public tender
Chile’s rare salt flat fish faces threat from lithium mining project
British Columbia creates new mining ministry to tackle critical minerals amid doubts over capacity
Newmont sells Ontario gold mine to Orla for $850 million
BHP warns Australian mining not ready for low-cost competitors
Resolute Mining says it will pay Mali $160 million in tax dispute
Trump chooses oil fracking boss as energy secretary
Gold loses some luster after Trump’s decisive win
