The Impact of the COVID-19 Pandemic on the Macroeconomic Aggregates of the European Union

Đukić Aleksandar (), Štaka Mirjana and Drašković Dajana
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Đukić Aleksandar: High School of Catering, Trade and Tourism, Banja Luka, Bosnia and Herzegovina
Štaka Mirjana: Data d.o.o. East Sarajevo, Bosnia and Herzegovina
Drašković Dajana: Culture centre of East Sarajevo, Bosnia and Herzegovina

Economics, 2021, vol. 9, issue 2, 91-108

Abstract: Economic experts’ predictions of a slowdown in the EU’s global economy and economic growth in the year 2020 were based on various risks and uncertainties existing on a world scale, ranging from the US-China trade war, traditionally strained relations of the EU and the US on the one hand and the Russian Federation on the other, all the way to BREXIT and economic migration to developed EU countries. However, the COVID-19 pandemic has further aggravated those forecasts, so that the entire EU is recording a historic decline in all macroeconomic aggregates. The beginning of the pandemic in the EU was accompanied by the complete border lockdown of the entire Union, which greatly affected the economies of the member states. The EU is experiencing a decline of both real and nominal GDP, declining incomes, employment decline and unemployment increase. This paper will investigate the impact of COVID-19 onto GDP, unemployment, and EU public debt. Correlation-regression analysis confirms the positive correlation between these variables and the economic crisis caused by the COVID-19 pandemic. In addition to the economic crisis, a crisis of EU health systems, which requires huge economic investments. A more prominent economic recovery is hard to expect until the global pandemic ends. One thing is for certain, this economic crisis will continue in 2021, whereby a more significant recovery is expected only in the year 2022. Certainly, it will take years to make up for the economic losses caused by the pandemic.

Keywords: COVID-19 pandemic; EU; EU GDP; EU macroeconomic aggregates; economic crisis (search for similar items in EconPapers)
JEL-codes: E00 E01 E24 F43 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:econom:v:9:y:2021:i:2:p:91-108:n:4

DOI: 10.2478/eoik-2021-0023

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