The European Commission forecast the eurozone economy will drop deeper into recession this year and rebound less steeply in 2021 than previously thought. France, Italy and Spain are struggling the most due to the COVID-19 pandemic.
The EU executive said the eurozone would contract by a record 8.7 percent this year before rising by 6.1 percent in 2021. In early May, the Commission had forecast a downturn this year of 7.7 percent and a rebound in 2021 of 6.3 percent.
The EU executive significantly cut its earlier forecasts for France, Italy and Spain and now expects downturns in excess of 10 percent this year in each nation. For Germany, the 2020 downturn would be 6.3 percent, less pronounced than May forecast of 6.5 percent. The rebound in Germany in 2021 is however expected to be less pronounced than previously estimated. The Commission said its inflation forecasts were little changed, at 0.3 percent this year and 1.1 percent in 2021
