EURO ZONE OUTLOOK MUCH BETTER AFTER EU STIMULUS, SAYS POLL
Euro zone economic growth next year will be slightly stronger than previously thought, according to a Reuters poll of forecasters taken after European Union (EU) leaders agreed on 750 billion euros to support economies ravaged by the coronavirus.
But economists surveyed July 22-28 also concluded it would take two or more years for euro zone gross domestic product to reach pre-COVID-19 levels, despite trillions of euros of stimulus from the European Central Bank (ECB) and governments, Richa Rebello wrote for Reuters on July 29, 2020.
The deal, which was not unexpected but was decided earlier than many analysts had anticipated, will bring the EU to the capital markets as a borrower for the first time. But that economic stimulus won’t be felt until 2021.
About three-quarters of economists, or 29 of 38, said their confidence around the prospects for euro zone economies from next year onward had improved, including three who said it had significantly improved. But for now, they only marginally upgraded their growth forecasts. “While the size of the fund is not large enough to be a game changer from a macroeconomic perspective, common issuance of this magnitude of debt is a historic step for Europe and represents a pivotal change in the way the EU tackles crises,” said Angel Talavera, head of European economics at Oxford Economics.