EU Public Debt to Increase by 15% by Year-End, Reach 95% of GDP - EIB Forecast

MOSCOW (Pakistan Point News / Sputnik - 21st January, 2021) The public debt across the European Union countries is forecast to reach 95 percent of the GDP by the end of 2021, which would be an increase of 15 percentage points since the outbreak of COVID-19, the European Investment Bank (EIB) said in a report on Thursday.

"The crisis-driven expansion of government debt could pose a medium-term threat to much needed public investment. Across the European Union, public debt is forecast to reach 95 percent of GDP by the end of 2021, an increase of 15 percentage points since the start of the pandemic," the EIB Investment Report read.

EU private investments are also forecast to suffer this year as some 45 percent of the bloc's companies plan to reduce investment and only 6 percent of the firms expect to increase it in what is a "dramatic reversal of the relative optimism seen in recent years," the bank noted.

At the same time, the European investment in climate change mitigation still remains insufficient and may hamper the efforts to achieve the Paris Climate Agreement goals, according to the bank.

"The gap between Europe's climate objectives and realised climate investment is growing. Since 2016, climate change mitigation investment has declined marginally as a percentage of GDP and overall investment, a trend that is likely to continue in 2021," the report read.

If the EU wants to meet its goal of cutting greenhouse gas emissions by 55 percent by 2030, investments into the energy transition need to rise from the average of 1.3 percent of GDP to 2.8 percent over the next decade, the European Investment Bank concluded.