Monitoring the EU's economic recovery: A promising start threatened by an unstable backdrop

Briefing 30-05-2022

The Covid-19 pandemic was a severe blow to EU Member States. Thanks to rapid and resolute responses at Member State and EU level, the economic impact of the pandemic was less severe than initially forecast and – at least until early 2022 – the economy seemed on the way to recovery. New challenges, both external (such as Russia’s war on Ukraine) and internal (such as inflation) could jeopardise this, however. In its Spring 2022 Economic Forecasts, the European Commission has revised the EU’s growth outlook downwards, and inflation forecasts upwards. In that context, this publication, the first in a series to be updated twice a year, aims to track the state of the EU economy and the trend of the recovery. It partly follows Eurostat’s ‘recovery dashboard’, in choosing GDP, inflation, the unemployment and ‘not in employment, education or training’ (NEETs) rates, as well as the deficit and debt indicators. The unemployment and NEETs rates, however, are broken down by gender, to highlight the significant differences faced by women in the labour market. Similarly, the publication focuses on the main components of the harmonised index of consumer prices (HICP), to show the various trends and their evolution over the past three years. In addition, it provides information on the use of the extraordinary tools the EU created to mitigate the socio-economic impact of the pandemic and promote a quality recovery: the three safety nets initially established for workers, businesses and sovereigns, as well as the subsequent ground-breaking Next Generation EU (NGEU) recovery instrument with its Recovery and Resilience Facility (RRF).