Home / Knowledge / News / Textiles / EU economy's near-term outlook looks brighter than expected in spring

EU economy's near-term outlook looks brighter than expected in spring

10
Jul '21
Pic: Shutterstock
Pic: Shutterstock
The improving health situation and ensuing continued easing of virus containment measures are putting European Union (EU) economies back in motion. The near-term outlook for the European economy looks brighter than expected in spring, the European Commission said in its Summer 2021 Economic Forecast.

The contraction of gross domestic product (GDP) in the first quarter this year turned out to be marginal, and milder than suggested by Eurostat’s Preliminary Flash Estimate.

Upbeat survey results among consumers and businesses, as well as data tracking mobility, suggest that a rebound in consumption is already underway and set to strengthen in the coming months.

There is also evidence of a beginning revival in tourism activity, which should also benefit from the new EU Digital COVID Certificate. Together, these factors are expected to outweigh the temporary production input shortages and rising costs hitting parts of the manufacturing sector.

Overall, GDP is now forecast to grow by 4.8 per cent in 2021 and 4.5 per cent in 2022 in both the EU and the euro area. The volume of output is projected to return to its pre-crisis level (2019-Q4) in the last quarter of 2021, which is a quarter earlier than expected in the Spring Forecast for the euro area.

However, economic activity in the fourth quarter of 2022 would remain about 1 per cent shy of the level that was expected before the pandemic, based on an extrapolation of the Winter 2020 Interim Forecast. The speed of the recovery will vary significantly across the EU member states. Some are expected to see economic output return to their pre-pandemic levels by the third quarter of 2021, but others would take longer.

The forecast for inflation this year and next has also been revised upwards, though retaining a hump-shaped profile. Rising energy and commodity prices, production bottlenecks due to the shortage of some input components and raw materials and capacity constraints vis-à-vis booming demand both at home and abroad are expected to put upward pressure on consumer prices this year.

In 2022, pressures are assumed to moderate gradually as supply constraints resolve, order backlogs clear, and demand growth moderates. Accordingly, inflation in the EU is now forecast to average 2.2 per cent this year and 1.6 per cent in 2022. In the euro area, inflation is forecast to average 1.9 per cent in 2021 and 1.4 per cent in 2022.

Uncertainty and risks surrounding the growth outlook are high but remain overall balanced. The threat posed by the spread and emergence of variants of concern underscores the importance of a further rapid increase in full vaccination. Economic risks relate in particular to the response of households and firms to changes in restrictions and the impact of emergency policy support withdrawal.

Fibre2Fashion News Desk (DS)


Must ReadView All

Pic: Shutterstock

Textiles | On 27th Sep 2021

China's infrastructure plan to spur domestic demand, economic change

China’s State Council's executive meeting recently adopted the 14th...

Pic: Shutterstock

Apparel/Garments | On 27th Sep 2021

AAFA calls for tariff relief as US industry deals with shipping crisis

American Apparel & Footwear Association president and CEO Steve Lamar ...

Pic: Shutterstock

Textiles | On 27th Sep 2021

Bangladesh seeks duty-free market access to US

Bangladesh recently urged the US to provide duty-free access to its...

Interviews View All

Textile Industry, Head honchos

Textile Industry
Head honchos

Marry with brand ethos

Vandana Narang, National Institute of Fashion Technology

Vandana Narang
National Institute of Fashion Technology

Campus placements are low due to lockdowns

Textile Industry, Head honchos

Textile Industry
Head honchos

Ensured payment of fee was least concern for students

Erwin Devloo,

Erwin Devloo

The Picanol Group is a diversified industrial group active worldwide in...

Kurt Wedgwood,

Kurt Wedgwood

From design to raw material to fabrication and ultimately to delivery -...

Ghatit Laheru,

Ghatit Laheru

When the 2001 tremblor wrecked the Kachchh region of Gujarat throwing many ...

Pranesh Sridharan & Berndt Koll, Lenzing

Pranesh Sridharan & Berndt Koll
Lenzing

The Lenzing Group produces Lenzing Lyocell and Modal cellulosic fibres of...

Dr. Sean Blamires, Evolution and Ecology Research Centre

Dr. Sean Blamires
Evolution and Ecology Research Centre

Using spider silk for clothing may not seem to be an attractive...

Tiasha Renganathan, Twinery Innovations by MAS

Tiasha Renganathan
Twinery Innovations by MAS

Twinery-Innovations by MAS is the innovation arm of Sri Lankan company MAS ...

Shalini Sharma & Shweta Pundir Sharma, Six Yard Story

Shalini Sharma & Shweta Pundir Sharma
Six Yard Story

Six Yard Story is a premium artisanal brand with a focus to bring handloom ...

Raghavendra Rathore, Label Raghavendra Rathore Jodhpur

Raghavendra Rathore
Label Raghavendra Rathore Jodhpur

Being one of the first designers to use the "Brand India" positioning for...

Sandeep Gonsalves & Sarah Gonsalves, Sarah & Sandeep

Sandeep Gonsalves & Sarah Gonsalves
Sarah & Sandeep

Established in 2012, Sarah & Sandeep is a luxury menswear label...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


September 2021

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search