The forecast projects that the EU economy will contract by 7.4% in 2020 before recovering with growth of 4.1% in 2021 and 3% in 2022. Compared to the Summer 2020 Economic Forecast, growth projections for both the euro area and the EU are slightly higher for 2020 and lower for 2021. Output in both the euro area and the EU is not expected to recover to its pre-pandemic level in 2022. Due to the coronavirus pandemic, economic activity in Europe suffered a severe shock in the first half of the year and rebounded strongly in the third quarter as containment measures were gradually lifted. However, the resurgence of the pandemic in recent weeks is resulting in disruptions as national authorities introduce new public health measures to limit its spread. Furthermore, the economic impact of the pandemic has differed widely across the EU and the same is true of recovery prospects. They reflect the spread of the virus, the stringency of public health measures taken to contain it, the sectoral composition of national economies and the strength of national policy responses. The epidemiological situation means that growth projections over the forecast horizon are subject to an extremely high degree of uncertainty and risks. On the upside, however, NextGenerationEU, the EU's economic recovery programme, including the Recovery and Resilience Facility, is likely to provide a stronger boost to the EU economy than projected, as national plans are put in place.