MNI BRIEF: NGEU Potential Growth Lift Less Than Expected -ECB
MNI (LONDON) - Updated estimates on the implementation and impact of EU’s NextGenerationEU programme “indicate a smaller impact on potential output over the period 2020 to 2030n than estimated in 2022”, the European Central Bank said in a paper on its Economic Bulletin LINK https://www.ecb.europa.eu/press/economic-bulletin/articles/2025/html/ecb.ebart202408_03~04121f4ea9.en.html
The estimated impact on the Eurozone's potential output by 2024 is only 0.2% -- rather than the expected 0.5% -- and the long-term impact of 1.3% is expected to materialise only in 2033 instead of 2030. The smaller impact “reflects the fact that the previously anticipated effects of investments hardly materialised in 2022-2023, with 2024 being a transition year” and a pick up is expected from this year.
EU member states have already applied for EUR 650 billion from the EUR 724 billion from the RRF fund with countries entitled to receive EUR 532 billion. However, the ECB expects that a little less than EUR 486 billion of the programme will be spent by the August 2026 deadline.