Outlook: EU economy will fall 7.4% this year before recovery in 2021

May 6 (UPI) -- The European economy will see a record contraction of 7.4 percent by the end of 2020 due to the impact of the coronavirus pandemic, EU forecasters said in an analysis Wednesday.

The European Commission's Spring 2020 Economic Forecast predicts "very severe socio-economic consequences" as a result of the crisis and warns it will be a recession of "historic proportions."

The report, however, also projects a quick recovery and overall growth of 6 percent in 2021.

The forecast expects the economy of the eurozone -- the 19 EU members that use the euro currency -- to shrink 7.6 percent this year and grow 6.2 percent next. Eurozone unemployment will rise to 9.5 percent and fall to 8.5 percent next year.

Wednesday's analysis projects declines of 9.5 percent for Italy and 9.4 percent for Spain, while Britain is in line for a loss of 8.3 percent. It expects Greece to see the greatest decline (9.7 percent) and France an 8.2 percent contraction.

"Europe is experiencing an economic shock without precedent since the Great Depression," said Paolo Gentiloni, European commissioner for the economy. "Both the depth of the recession and the strength of recovery will be uneven, conditioned by the speed at which lockdowns can be lifted, the importance of services like tourism in each economy and by each country's financial resources."

The report notes that the pandemic has "severely affected" consumer spending, industrial output, investment, trade, capital flows and supply chains, and forecasters expect a total recovery by the end of 2021.

Also, new growth projections were revised down by about 9 percent from the EU's previous forecast last fall.