EU FORECASTS ‘RECESSION OF HISTORIC PROPORTIONS' THIS YEAR

The European Union predicted “a recession of historic proportions this year” due to the impact of the coronavirus as it released its first official estimates of the damage the pandemic is inflicting on the bloc’s economy.

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The 27-nation EU economy is predicted to contract by 7.5% this year, before growing about 6% in 2021, assuming countries steadily ease their lockdowns.

The group of 19 nations using the euro as their currency will see a record decline of 7.75% this year, and grow by 6.25% in 2021, the European Commission said in its Spring economic forecast.

“It is now quite clear that the EU has entered the deepest economic recession in its history,” EU Economy Commissioner Paolo Gentiloni told reporters in Brussels. As the virus hit, “economic activity in the EU dropped by around one third practically overnight,” he said.

More than 1.1 million people have contracted the virus across Europe and over 137,000 have died, according to the European Centre for Disease Prevention and Control. Unclear outbreak data, low testing rates and the strain on health care systems mean the true scale of the pandemic is much greater.

With the spread slowing in most European countries, people are cautiously venturing out from confinement and gradually returning to work, but strict health measures remain in place amid concern of a second wave of outbreaks and any return to something like normal life is at least months away.