EU Commission: Severe risks to the economic outlook, tilted to the downside
|In its Summer 2020 economic forecast, the European Commission noted that “the EU economy will experience a deep recession this year due to the coronavirus pandemic, despite the swift and comprehensive policy response at both EU and national levels.”
Additional takeaways
Sees EU area 2020 GDP at -8.7% vs. the previous forecast of -7.7%.
Cuts Spain growth estimate for 2020 To -10.9% from -9.4%.
Downgrades Italy growth estimate for 2020 To -11.2% from -9.5%.
2021 forecast now at 6.1% from 6.5%.
Downgrades French growth estimate for 2020 To -10.6% from -8.2%.
Upgrades German growth estimate for 2020 To -6.3% from -6.5%.
Germany’s economic rebound in 2021 to be less pronounced than previously expected.
Forecasts revising estimates to 5.3% growth
Economic recovery will be uneven across member states.
There are 'severe' risks to the economic outlook, tilted to the downside.
Euro area economic divergences are 'more pronounced.'
Market reaction
The discouraging EU economic forecasts combined with notable US dollar demand continue to weigh on the EUR/USD pair.
At the time of writing, the spot sheds 0.21% to meanders daily lows of 1.1281.
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