EU to rise in GDP estimates but risks remain

ROME, 07 NOV – Robust recovery, GDP recovering the levels before the pandemic by December, and the ECB-recovery fund tandem that gives countries time for reforms, in order to relaunch economies beyond the mere goal of recovering pre-existing levels -Covid. This is the scenario that Frankfurt, Brussels and the Eurozone capitals are trying to shore up. Why inflation back to gallop could upset the Frankfurt roadmap. And the risks of the ‘fourth wave’ are putting a mortgage on the new growth estimates that the European Commission will publish on Thursday 11 November. Economic growth in the EU “continues to appear strong”, but the prospects are dominated by “high uncertainty”, with “some significant risks of worsening”, said EU Commissioner for Economic Affairs Paolo Gentiloni. It seems obvious a better revision of the 4.8% and 4.5% growth for the Eurozone in 2021 and 2022, while for Italy the most recent figures from Brussels indicated a + 5% for 2021 which will be adjusted to upward. The government also speculates to exceed the 6% threshold. But Gentiloni’s worry are the factors that in the meantime have undermined the forecast scenario. That is: increase in infections, with vaccinations still too low in some countries. If the field extends from the euro area to the European Union of 27, especially the eastern bloc, there are risks of hard lockdowns, a new blow to growth that can also have repercussions in the central core of the euro. Second, global trade bottlenecks, holding back the manufacturing sector. Pushing up prices, together with energy price increases, is the third risk factor. (HANDLE).

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