According to the European Commission, the EU economy will experience its fastest growth in decades this year, which has boosted its forecasts for this year and next as the easing of pandemic-related restrictions fuels a rebound in activity.
EU-wide growth is set to increase by 4.8 percent this year and 4.5 percent next year, Brussels said on Wednesday. That would be the fastest expansion since 1976, although the bloc had far fewer nations then.
“The EU economy will see its fastest growth in decades this year, fueled by strong demand both at home and globally and a faster-than-expected reopening of services sectors since the spring,” said Paolo Gentiloni, the bloc’s economics commissioner.
The EU economy was hit by a 6 percent contraction last year, the worst since its inception.
Germany will grow 3.6 percent this year, while France will grow 6 percent and Italy 5 percent, the Commission predicts. Romania is tipped to record the fastest growth, at 7.4 percent.
The eurozone’s gross domestic product is also set to grow by 4.8 percent this year and 4.5 percent in 2022, compared to previous forecasts of 4.3 percent and 4.4 percent.
That would bring real GDP back to pre-crisis levels in the last quarter of this year, ahead of the Commission’s forecast this spring.
The improving outlook is fueled by rapid advances with vaccinations, which have seen many European countries relax restrictions, especially service companies. Tourist travel within the EU is also starting to revive, boosting consumer spending.
More than 62 percent of the adult population in the EU and European Economic Area has received at least one vaccine dose.
However, Gentiloni warned that it was “essential” for member states to “maintain policy support for as long as necessary” to “keep the recovery on track”.
“We need to redouble our vaccination efforts, building on the impressive progress made in recent months; the spread of the Delta variant is a stark reminder that we have not yet emerged from the shadows of the pandemic,” he said.
The rapid expansion, combined with rising energy prices and production bottlenecks, will push consumer prices up this year, the committee said. Inflation in the euro area is expected to average 1.9 percent this year, but it predicted that pressures would ease in 2022, pushing inflation down to 1.4 percent.