The Effect of the Covid-19 Pandemic on Economic Growth and R&D Spending in the EU Countries

Abstract

The article deals with the issue of economic growth and R&D spending in the EU-27 countries during the Covid-19 pandemic. Using time series analysis, the article examines whether the pandemic and the associated restrictive measures and bailout packages have impacted economic growth and R&D funding. To answer this research question, the development of GDP and GERD Eurostat data was taken, and the period of 2011–2021 was analysed. Besides the development of the monitored indicators (GDP, GERD, GERD as a percentage of GDP), the chain index was constructed to compare year-on-year changes and to analyse the growth rate of the indicators further. The research shows that Covid-19 impacted GDP as well as the field of R&D. Talking in absolute numbers, the impact of the pandemic can be seen in the decrease of both GDP and GERD in 2020. However, since the GDP of the EU-27 countries decrease reached 4 % in 2020 while GERD only reduced by 1 % in the same year, the overall effect on the R&D intensity was positive. However, while the GDP and GERD resumed their growth in 2021 – annual change of 8 % (GDP) and 6 % (GERD) – R&D intensity declined by 2 % compared to 2020. This decline was caused by a more significant growth of GDP than GERD in the same year. However, based on the analysis performed, it can be concluded that the impact of the Covid-19 pandemic on GDP and GERD of the EU-27 countries was neither significant nor had a long-term nature.