The analysis points out that Ireland was the only country to register positive growth in 2020 but its domestic economy still felt the impact of pandemic restrictions in early 2021. It is expected to rebound in the second half of the year. Exports are increasingly benefiting from an improving external environment. In the first half of 2021, household incomes will remain shielded from the crisis by state income support. The budget deficit is expected to decrease from 2022 onwards, but risks to the macro-fiscal outlook remain high.
The Spring 2021 Economic Forecast projects that the EU economy will expand by 4.2% in 2021 and by 4.4% in 2022. The euro area economy is forecast to grow by 4.3% this year and 4.4% next year. This represents a significant upgrade of the growth outlook compared to the Winter 2021 Economic Forecast which the Commission presented in February. Growth rates will continue to vary across the EU, but all Member States should see their economies return to pre-crisis levels by the end of 2022.
Paolo Gentiloni, Commissioner for Economy said:
The shadow of COVID-19 is beginning to lift from Europe's economy. After a weak start to the year, we project strong growth in both 2021 and 2022. Unprecedented fiscal support has been – and remains – essential in helping Europe's workers and companies to weather the storm. The corresponding increase in deficits and debt is set to peak this year before beginning to decline. The impact of NextGenerationEU will begin to be felt this year and next, but we have much hard work ahead – in Brussels and national capitals – to make the most of this historic opportunity. And of course, maintaining the now strong pace of vaccinations in the EU will be crucial – for the health of our citizens as well as our economies. So let's all roll up our sleeves.
- Publication date
- 12 May 2021
- Representation in Ireland