InstaForex

July 8, 2021

Delta Variant Threatens, Will European Zone Economic Growth Be Affected?

 As is well known that the spread of pandemics especially in the European Zone is increasingly worrying with the emergence of a new variant namely Delta. On that basis, a handful of market players began to doubt the economic growth of the European zone.


Today, the European Commission came forward to shed light on that the European zone’s economy will grow faster than previously anticipated this year and next, despite concerns over the Covid-19 Delta variant.


The executive division of the European Union also expects higher inflation this year than previously expected, but estimates of rising consumer prices are expected to slow next year.



The EU Commission predicts the European zone will grow by 4.8% this year, much faster than the 4.3% expansion it forecast in May. This change was due to the reopening of the national economy in the second quarter which has benefited the services sector.


At the same time, vaccination distribution is expected to be faster and indirectly reduce the spread of pandemics and curb Delta variants. According to EU economist Paolo Gentiloni, the contagion of the Delta variant is a clear reminder that we are still not out of the shadow of Covid-19.


However, he remains optimistic that the European economy will record faster growth. For the foreseeable future, vaccine distribution will continue to be intensified, with so far more than 62% of the adult population in the EU having received at least one dose of the vaccine and 45% being fully vaccinated.


Inflation, which is one of the main concerns of economists as global economic growth picks up, is expected to reach 1.9% this year due to “temporary factors”, up from 1.7% previously estimated.