As confinement measures are gradually lifted, economic growth is projected to rebound strongly in the second half of this year. The euro area is projected to grow by 4.3% in 2021 and 4.4% in 2022, boosted by private consumption, considerable fiscal support and vigorous external demand, notably from the United States. Unemployment is projected to decline to close to pre-crisis levels through 2022. A swift and effective implementation of the EU recovery plan would further bolster the recovery.
In light of the COVID-19 crisis, the top immediate policy priority is to ensure efficient use of Next Generation EU, a recovery plan combining loans and grants of about 5.5% of EU27 2019 GDP to support member states’ recovery policies. Successful roll-out and implementation of this support will be crucial to reinvigorate economic growth across the European Union, boost digitalisation and innovation, bolster resilience to future shocks and achieve climate and inclusiveness objectives.
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2021 Structural Reform Priorities
After years of crisis, the European economy has robustly expanded in 2017, helped by very accommodative monetary policy, mildly expansionary fiscal policy and a recovering global economy. GDP growth is projected to remain strong in 2018 and 2019 by the standards of recent years.
The euro area economy has expanded since 2014, helped by very accommodative monetary policy, mildly expansionary fiscal policy and a recovering global economy. GDP growth is projected to slow somewhat, but to remain strong by the standards of recent years.