OECD Worsens GDP Growth Forecast For Eurozone In 2021
The Organisation for Economic Co-operation and Development (OECD) has cut its forecast for eurozone GDP growth for 2021 to 5.2% from the 5.3% expected in September, according to the organisation’s winter report.
For 2022, the GDP growth forecast has also been worsened by 0.3 p., to 4.3%. In 2023, the OECD expects eurozone GDP growth of 2.5%. In 2020, the organisation estimates that eurozone GDP will fall by 6.5%.
« GDP growth will be supported by high levels of consumption…. We forecast a fall in unemployment to levels close to pre-crisis levels. The rapid opening of the economy, disruptions in the production supply chain and rising energy prices are all contributing to accelerating inflation, » the OECD wrote.
At the same time, the organisation believes that inflation will return to below the ECB’s 2% target by the end of 2022.
Monetary policy, according to the OECD, will remain adaptive even if the Pandemic Emergency Purchase Programme (PEPP) is phased out. After that, the implementation of recovery plans should support economic activity and potential growth.