July 7 (UPI) -- The European Commission on Tuesday updated its economic forecast for the rest of 2020 and 2021, which mostly projects steeper declines across the 27-member bloc.
The commission said it expects the bloc's collective economies will contract by 8.3 percent this year before seeing growth of 5.8 percent next year. That's a change from May when it forecast at 7.4 percent contraction for 2020 and 6.1 percent growth in 2021.
"The economic impact of the lockdown is more severe than we initially expected," Valdis Dombrovskis, executive vice president for an Economy that Works for People, said in a statement released by the commission. "We continue to navigate in stormy waters and face many risks, including another major wave of infections.
Dombrovskis said although recovery is expected, the commission must "be vigilant about the differing pace of the recovery."
"We need to continue protecting workers and companies and coordinate our policies closely at EU level to ensure we emerge stronger and united," he said.
The commission projects Italy's economy to contract by the greatest margin this year, 11.2 percent. The forecast for Germany's decline was actually upgraded from 6.5 percent to 6.3 percent.
"This forecast shows the devastating economic effects of that pandemic," Paolo Gentiloni, the bloc's economic commissioner, said. "The policy response across Europe has helped to cushion the blow for our citizens, yet this remains a story of increasing divergence, inequality and insecurity.
"This is why it is so important to reach a swift agreement on the recovery plan proposed by the commission."