European Commission upgrades growth forecasts

The European Commission upgraded its forecasts for growth on Wednesday, citing fiscal support, progress in the Covid-19 vaccination programme and easing restrictions.

The EC now expects EU economic growth of 4.2% for 2021 and 4.4% for 2022. This is up from a previous forecast for 3.7% growth and 3.9% growth, respectively.

Meanwhile, the eurozone economy is projected to grow by 4.3% in 2021 and 4.4% next year, compared to a previous forecast of 3.8% for both.

In 2020, the EU economy shrank by 6.1%, while the eurozone economy contracted 6.6%.

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."