Economic Developments in the Euro Zone
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Data released on Friday showed that the four major economies in the euro zone have escaped the historical pandemic-driven downturn and resumed steady growth in the three months to June.
In the three months to June, the output of Germany, France, Italy, and Spain all recorded month-on-month growth. Except for Germany, the performance of all other countries exceeded economists’ expectations.
Germany’s GDP grew by 1.5% from the previous quarter, which was lower than the 2% expected by economists surveyed by Reuters, but it resumed growth after contracting 2.1% in the first three months of this year.
France reported an economic growth of 0.9%, while Italy grew by 2.7%, and Spanish output grew by 2.8%.
The data strengthened analysts’ hopes that the euro zone began to put the damage of the coronavirus pandemic behind.
Economists expect Eurozone economy Although the spread of the highly contagious Delta Coronavirus variant is expected to account for 90% of all Covid-19 infections in Europe in August.
“The vaccination rate is already high and it is rising steadily,” said Jean Pisani-Ferry, a researcher at the Bruegel Think Tank and Peterson Institute for International Economics in Brussels. “There may be some new restrictions, but I think as long as there is no risk of overwhelming the hospital system, the government will not take lockdown measures.”
After falling behind other major economies in rebounding from the pandemic in the past year, the euro zone is expected to begin to narrow the gap. When GDP data for the entire euro zone is released, the growth rate in the second quarter will be 1.5% to 2 % Between late Friday.
Earlier this week, the U.S. reported that GDP growth in the second quarter An increase of 1.6% over the previous quarter, while China Earlier this month, it said its economy had grown by 1.3% over the same period.
China surpassed its pre-pandemic output level last year, and the United States reached the same level in the second quarter of this year, but the euro zone is not expected to achieve this goal until the end of this year.
Economists attribute Germany’s slower-than-expected expansion to the supply constraints that its manufacturers—especially large automakers—have been struggling to cope with due to shortages of materials such as semiconductors and bottlenecks in container shipping.
Carsten Brzeski, head of macro research at ING, said that German industry has been hit by “a long list of supply chain frictions” on the grounds that the blockade of the Suez Canal earlier this year disrupted global shipping.He said that delays in the production and delivery of microchips and semiconductors were also one of the reasons, and warned that “there may be problems now. [German] Waterways caused by heavy rain”.
France’s 0.9% growth rate was slightly better than expected, and its first-quarter GDP data was revised upwards to show that the economy was flat, which meant that the country narrowly avoided a double-dip recession in the winter months.
The French National Statistics Office stated that the French economy was boosted by a 1.1% increase in investment and a 0.9% increase in household spending.
Italy’s GDP rebounded to 2.7% in the second quarter, exceeding the 1.3% expected by economists. Other data showed that its unemployment rate fell from 10.2% in May to 9.7% in June, which was lower than expected.
Spain’s GDP grew by 2.8% in the second quarter, exceeding the 2.2% expected by economists, and rebounding sharply from the 0.4% decline in the first quarter.
According to our data world, after a slow start, the European Union’s vaccination rate has accelerated in recent weeks. On Tuesday, the number of injections per 100 people in the European Union exceeded that of the United States. The European Union reached 102.6 times and the United States 102.4 times.