Europe will experience a recession this year of a depth unmatched since the Great Depression and the UK will be one of the hardest hit, the European commission has said.
Economic forecasts provided by commission on Wednesday suggest that the UK will experience an 8.3% drop in gross domestic production by the end of the year, with investment down by 14% and a doubling of unemployment.
In terms of the drop in GDP – the total value of goods and services produced in a country in a year – only Italy, Greece, Spain and Croatia among the EU member states will endure a bigger loss to the economy.
The commission said that the coming recession will be of historic proportion. The EU economy is forecast to contract by 7.5% in 2020 and grow by around 6% in 2021. But countries will be impacted and find they are able to recover to greater and lesser degrees. Valdis Dombrovskis, commissioner for the economy, said:
At this stage, we can only tentatively map out the scale and gravity of the coronavirus shock to our economies. While the immediate fallout will be far more severe for the global economy than the financial crisis, the depth of the impact will depend on the evolution of the pandemic, our ability to safely restart economic activity and to rebound thereafter. This is a symmetric shock: all EU countries are affected and all are expected to have a recession this year.”
The UK’s GDP is predicted to bounce back by 6% by the end of 2021, according to the commission’s predictions, although this presumes the continuation of the status quo between Britain and the EU in its trading relationship.