FRANKFURT, Germany (AP) — The European economy slowed noticeably at the end of last year as surging COVID-19 cases driven by the omicron variant piled on top of supply shortages and rising energy prices that dented consumer purchasing power. The result: An economic winter of discontent that may not lift until later this year.
Much of the slowdown came in Germany, Europe’s largest economy, where difficulty getting needed parts held back its export-heavy manufacturing economy. France, Spain and Italy showed stronger growth.
In the 19 countries that use the euro, growth in the last three months of 2021 came in at 0.3%, the European Union’s statistics agency said Monday. That compared with growth of 2.2% in the July-September quarter.
For the year, it was 5.2%, underlining how Europe’s economic recovery from the pandemic has moved at a somewhat slower pace than the rebound in the United States, where 2021 growth was 5.7%. U.S. growth was boosted by what economists say was a comparatively larger share of federal stimulus spending than what took place in Europe.
And the friction in Europe’s gears isn’t over yet. Growth “might weaken further” in the current quarter, according to economists at UniCredit bank.
Germany, usually a growth motor for the eurozone, shrank 0.7% in the fourth quarter and would slide into a shallow recession if growth is negative again in the first three months of this year. Two straight quarters of declining output is one definition of a recession.
No. 2 eurozone economy France, on the other hand, saw growth of 0.7% over the previous quarter, leaving the year’s figure at 7%. That is the strongest since 1969. The full-year figure was buoyed by strong consumer spending and services in the third quarter as many activities resumed during a lull in the pandemic.
Analysts foresee a pickup in the second quarter of this year as supply chain difficulties ease as hoped.
The inflation figure presents a communications challenge for European Central Bank President Christine Lagarde when bank policymakers meet Thursday. Lagarde is expected to stick to her view that inflation is temporary and that the bank is far from raising interest rates, the usual antidote to higher inflation.
Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
For all the latest Health News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsBit.us is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
