The Eurozone economy grew faster than expected in the second quarter to emerge from the recession caused by the health crisis, while the easing of pandemic restrictions helped inflation exceed the European Central Bank’s (ECB) target of 2%.
Preliminary estimates show GDP growth of 2% in the group of 19 countries that use the euro currency during the period from April to June of the last quarter, to record a growth of 13.7% compared to the same period a year ago, when quarantine restricted economic activity.
But unlike the economies of the United States and China, which have exceeded their pre-pandemic levels, the eurozone economy remains 3% smaller than it was at the end of 2019, and it is noteworthy that economic growth exceeded expectations of 1.5% for the period from April to June and expectations of growth on an annual basis, which was 13.2%.
Inflation in the euro area accelerated to 2.2% in July, after it was 1.9% last June, recording its highest value since October 2018, and exceeding analysts’ expectations, which were only 2%. According to reports, the region’s best performing economies were the third and fourth largest, which are Italy and Spain with quarterly growth of 2.7% and 2.8%, respectively, while the Portuguese economy, famous for its tourism, expanded by 4.9%.
Since the beginning of 2020, the eurozone has suffered twice from the economic contraction for two consecutive quarters, which actually represents a recession in the economy, especially with the damage caused by the recent epidemic restrictions during the period extending from the end of 2020 until the beginning of 2021.
Economic activity declined during the first three months of this year, mainly due to weakness in Germany’s economy, as the quarantine that began in November reduced the rate of private consumption in the country.
However, the largest economy in Europe returned to growth during the second quarter, but its economy expanded by 1.5% compared to the first quarter, showing a weak recovery, exceeding expectations. As for the French economy, the second largest economy in the eurozone, enjoyed a growth of 0.9%, exceeding expectations, coinciding with the government’s gradual easing of its third quarantine.