According to the European Commission's Autumn 2021 Economic Forecast, the EU economy is projected to keep expanding over the forecast horizon, despite mounting headwinds.
Most Member States are expected to reach the pre-pandemic volume of output by the end of 2021, while a few others will fully recover in 2022.
Economic indicators suggest that growth continued unabated in the summer, also underpinned by a revival of intra-EU travel that benefited in particular EU touristic regions. The projected growth rate of 2.1% for the third quarter – corroborated by Eurostat’s preliminary flash estimate released after the cut-off date – allowed the EU as a whole to virtually close the gap with its pre-pandemic output level and move from recovery into expansion.
In particular, Greece’s economy rebounded strongly in the second quarter of 2021, by 3.4% compared with the previous quarter. Real GDP reached its prepandemic level in the second quarter of 2021.
The
recovery was driven by domestic demand, in
particular investment, and by the accumulation of
inventories, while the ongoing fiscal stimulus
provided a crucial role in supporting the economy.
The authorities continue to provide targeted and
temporary support to the economy, notably
towards sustaining employment. The
unemployment rate decreased over the summer,
also supported by more hirings in tourism sector.
While part of the high growth that is forecast for 2021 reflects the depth of the recession in 2020, the improving sanitary situation, in terms of both vaccination rates, and total number of severe cases, has allowed for an easing of containment measures. This is expected to continue enabling the realisation of deferred purchases, further contributing to private consumption growth, especially in 2022.
The economic activity in the second half of 2021 is also expected to be supported by the launch of the implementation of projects presented in Greece’s RRF.
Overall, GDP
is forecast to rebound by 7.1% in 2021, and to
grow by 5.2% and 3.6% in 2022 and 2023,
respectively. Growth in 2022 and 2023 is expected
to be driven by public and private investment, as
the roll-out of projects under the Recovery and
Resilience Plan is expected to sustain momentum.
The forecast assumes a cumulative amount of
3.6% of 2019 GDP for expenditures financed by
RRF grants over the forecast horizon.
