Two workers at a car factory in Dresden, Germany, in early June.JENS SCHLUETER / AFP
The recovery takes shape in Europe.
After two quarters of economic downturn, which technically meant putting the EU in a new recession, the bloc's economy again grew strongly in the second quarter of the year.
Between April and June, the GDP of the Twenty-seven increased by 1.9%, according to the forecasts published this Friday by Eurostat.
If compared with the same quarter of the previous year, as a result of the debacle that then caused the first wave of the pandemic, the annual growth is 13.2%.
In both cases, these are percentages above those recently offered by the United States and China in the same period.
The Spanish economy grew by 2.8% in the second quarter, spurred by the de-escalation
The data is even better for the euro zone countries. The economies of the common currency grew 2% in the second quarter and, in annualized terms, their GDP shot up 13.7%. Two relatively small countries, Portugal and Austria, were the ones that pulled the most between April and June, with quarterly growth of 4.9% and 4.3%, respectively. In annual terms, the country where the economy rebounds the most compared to mid-2020 is Spain, whose preliminary GDP estimates have also been offered this Friday, with an advance of 19.8% (2.8% quarterly).
The rest of the major European economies leave different sensations. Italy, like Spain, grew above average with 2.7% in the second quarter. And the pull of the European locomotive, Germany, with 1.5% was also notable. At the start of the year, it was precisely the German stumble (-1.8%) one of the biggest burdens that had led the Community GDP to recession. France also grew in the second quarter, but much more modestly compared to others: its GDP grew 0.9%.
Positive data is the general trend among European partners. "Growth is stronger than expected," said the European Commissioner for the Economy, Paolo Gentiloni, "European recovery is on the way." Also on the social network Twitter, the Italian highlighted the good performance of the economies of Spain and Italy in the second quarter. For Bert Colijn, senior economist at ING, the progression could have been greater had it not been for the supply problems in the industry, which has weighed somewhat down on Germany. "The economy of the euro zone continues to behave like a diesel engine: it takes time to start, but it cannot be underestimated when it picks up traction," says Colijn in statements collected by Reuters. Despite the growth of the delta variant of the coronavirus,which has forced the implementation of new measures to contain the epidemic in many countries, ING expects the euro zone to grow by 2% again in this third quarter.
Growth in # Q2 stronger than expected.
European recovery is underway.
- Paolo Gentiloni (@PaoloGentiloni) July 30, 2021
Two Eastern European countries, Lithuania and the Czech Republic, show the weakest progression among those that have already published their data.
In the first, the GDP increased by 0.4% quarterly and in the second it did so by 0.6%.
Both are, in addition, the two with the lowest progression in annual terms (7.8% in the Czech Republic and 8.6% in Lithuania), just ahead of Germany, which due to the lower impact of the first wave of the pandemic in its economy it has
advanced 9.2% in the last 12 months.
All in all, the European figures are generally good. Very good compared to the top two world economies. The bloc had so far been more hobbled in the recovery than the United States and China, as a result of the impact of the pandemic, stricter containment measures and a vaccination process that was progressing more slowly. The contrast was particularly significant at the start of 2021, when the EU returned to recession. In the second quarter, however, it grew more than the US (1.6% quarterly, 6.5% annualized) and China (1.3% quarterly, 7.9% annualized). However, these two countries have already closed the gap opened by the pandemic. Beijing announced in the first quarter that it had already recovered the level prior to the arrival of the coronavirus, an achievement that the US economy completed between April and June.
Inflation exceeds the ECB's target
The economic expansion is having a logical reflection on prices. Inflation in the euro zone in July stood at 2.2% in annual rate.
They are 0.3 percentage points more than in June.
The pull effect corresponds to a large extent to energy prices.
Without this component, inflation would stand at 0.9%, according to data also published this Friday by the community statistical office.
By groups, inflation in energy already reaches 14.1%, when comparing prices with those of a year ago, and stretches 1.5 points with respect to what it marked last month. Inflation in food, tobacco and alcoholic beverages also rose in July, from 0.5% in June to 1.6% in July. More flat is the evolution of services, with an annual 0.9% (0.7% in June), while non-energy industrial goods presented the lowest rate, 0.7%, in addition to being the only one that decreased compared to the previous month (1.2%).
Among the 19 euro partners, Estonia (4.9%) and Lithuania (4.3%) have the highest annual inflation rates. The least bulky correspond to Malta (0.4%) and Greece (0.6%). Spain exceeds the average and is at the top of the table with 2.9%, very close to what Germany marks (3.1%). Although what has traditionally been considered healthy for economic growth is inflation approaching 2%, without exceeding it, at the beginning of this month the European Central Bank (ECB) already announced a review of its objectives, ensuring that it would punctually tolerate a higher rate , as has happened in July for the first time since the coronavirus crisis began. With this, the supervisor made it clear that he expected peaks of this indicator,without this being translated into an immediate withdrawal of the monetary stimuli that it has inflated to stimulate the growth of the euro economies.