Graphic shows European Commission’s predicted economic damage.
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By Duncan Mil

May 7, 2020 - The European Union is facing its worst ever recession with gross domestic product projected to shrink by 7.4 per cent this year. In 2009, following the global financial crisis, its economy shrank by 4.5 per cent.

The European Economic Forecast is the first comprehensive look at the economic devastation resulting from the lockdown measures put in place by governments to get a grip on the coronavirus pandemic. In February, Brussels predicted that the euro area would achieve 1.2 per cent annual GDP growth this year. Now, the European Commission expects a 7.7 per cent fall for the 19-member eurozone.

The worst-hit country in the EU -- home to 440 million people -- will be Greece, losing 9.7 per cent of its economic output this year. The commission notes that although other parts of the Greek economy can restart soon, the lucrative summer months that account for 70 per cent of Greece’s annual tourism and hospitality revenues will be lost.

The economies of Italy and Spain, two of the countries hardest hit by the coronavirus pandemic, will most likely shrink by 9.5 and 9.4 per cent respectively this year, according to the forecast.

“Europe is experiencing an economic shock without precedent since the Great Depression,” the EU’s economy chief Paolo Gentiloni said on Wednesday.

The EU has already agreed on a €540-billion economic package to tackle the pandemic, and member states are currently discussing a longer-term fund which could potentially add up to €1.5 trillion to the recovery effort.

PUBLISHED: 07/05/2020; STORY: Graphic News
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