Gentiloni: Croatia among group of members states expected to recover fastest



European Commissioner for the Economy Paolo Gentiloni gives a press conference on the Spring 2020 Economic Forecast in Brussels on May 6, 2020. (Photo by Kenzo TRIBOUILLARD / POOL / AFP)

European Commissioner for Economy Paolo Gentiloni

Croatia is among five EU member states where economic activity is expected to return to the Q4 2019 level by the end of next year, European Commissioner for Economy Paolo Gentiloni said in Brussels on Wednesday.

By the end of 2021, only Germany, Austria, Croatia, Slovakia and Poland are forecast to recoup the level of economic activity seen in the last quarter of 2019. By contrast, the level of output in Italy, Spain and the Netherlands is forecast to remain more than 2% below the end-2019 level, Gentiloni said while presenting the Commission's spring economic forecast.

How well countries emerge from this crisis will depend on the severity of the pandemic and the stringency of their containment measures. It will also depend on their openness and the exposure of their economies to sectors that have been hit the most. Above all, the size of the policy support they undertake will be key, Gentiloni said.

This year the EU economy is expected to contract by a record 7.4% and the euro area economy by 7.7%. Next year the Commission expects a rebound of 6.1% in the EU and 6.3% in the euro area.

The lowest fall in economic activity for this year is expected in Poland, of 4.3%, while the largest falls are forecast for Greece (9.7%), Italy (9.5%), Spain (9.4%) and Croatia (9.1%).

With a gradual easing of measures to contain the pandemic, the economy is expected to recover in the second half of this year.

Germany is expected to endure a less steep contraction than most member states and recover faster to pre-pandemic output levels. Next year the German economy is forecast to rise at a rate of 5.9%.

"Still, Germany is set to experience its deepest recession since the war, at -6.5% in 2020," Gentiloni said.