European Union raises full-year growth forecast to 4.3%, keeps borrowing curb on hold

• Financial

On Wednesday, the European Union had issued a statement saying that the 26-member euro zone economy would spring back more strongly than previously estimated this year and the next, but had kept borrowing limits on hold at least until end-2022 in a bid to spur up the region’s growth momentum.

In point of fact, latest upbeat GDP (Gross Domestic Product) growth forecast for the 26-member bloc followed encouraging eurozone composite PMI (Purchasing Managers’ Index) data last month that rose by 1.1 per cent in April, beating analysts’ estimates, while a sharp rise in German exports in April on an annualized basis had added to further optimism over the pace of growth in eurozone economy.

19 eurozone economies sharing euro will grow 4.3% in 2021

On top of that, in the latest flashpoint of a likely upsurge in eurozone economies, the European Union’s executive arm had forecasted earlier in the day that the combined growth of 19 eurozone economies sharing the common currency euro, would grow by 4.3 per cent in 2021 and 4.4 per cent in 2022, above from a February forecast of 3.8 per cent in both fiscal years, as a vaccination logjam appears to have resolved and more Europeans had expressed strong intent to get vaccinated with Britain expecting to inoculate its entire population by early-August.

Meanwhile, as the European Union’s gross output forecast of 4.3 per cent for 2021 largely echoed an IMF (International Monetary Fund) estimate of 4.4 per cent made last month, the European Union said in a statement, “The EU and euro area economies are expected to rebound strongly as vaccination rates increase and restrictions are eased.

This growth will be driven by private consumption, investment, and a rising demand for EU exports from a strengthening global economy. ”