Eurozone G.D.P. Rises 2 Percent
The European economy emerged from a painful double-dip recession in the second quarter, rebounding faster than expected from the ravages of the coronavirus, as consumers spent their accumulated savings and restaurants, factories and other businesses came to life after easing pandemic control restrictions.
Gross domestic product, the broadest measure of economic output, rose 2% in the second quarter of the year in the euro area, up almost 14% from a year ago and reversing a contraction of 0.3% in the first three months of the year, reported Eurostat. , the European statistical agency, Friday.
But the euro zone’s recovery, although striking in its speed, is far from complete: it is still lagging behind the United States. While the US economy has returned to its pre-pandemic level in the second quarter, Europe is not expected to reach this threshold before the end of the year.
Sentiment and activity in services and manufacturing surged as governments scrambled to prevent further lockdowns in the spring and pressured citizens to step up vaccinations that are seen as key to sustaining a recovery and reduction of billions of dollars in pandemic support for workers and businesses. The vaccination campaign has paid off: This week the European Union edged the United States in terms of total vaccinations, adjusted for population, a turnaround from the spring.
Industrial goods order books have rapidly filled since the reopenings – so much so that some European manufacturers have started to express concern about meeting demand.
“Never before have sentiment been so positive among businesses and consumers in the euro area,” Bert Colijn, senior euro area economist at ING Bank, said in a note to clients. “This indicates that the economic rebound is in full swing. “
Reflecting the return of animal spirits, many of Europe’s biggest companies reported windfall profits this week, from an increase in aircraft deliveries at Airbus, the world’s largest aircraft maker, to consumer madness in buying expensive scarves and handbags at luxury retailer Hermès.
The recovery helped fuel a slight return in inflation, which reached 2.2% in July after gaining 1.9% the month before.
But the Delta variant recently lowered consumer confidence, as uncertainty began to spread among companies in the service sector after new cases of the virus emerged.
#Eurozone #GDP #Rises #Percent