Eurozone growth rebounded in the second quarter

The figures are pretty good, but the rise in contamination is already clouding the economic horizon. In the second quarter, the euro zone emerged from the recession: its gross domestic product (GDP) increased by 2%, according to data published Friday, July 30, by Eurostat, after the decline of 0.3% in the first quarter. In France, it increased by 0.9%, slightly higher than expected by the consensus of economists. Italy (2.7%), Spain (2.8%) and Portugal (4.9%) also recorded stronger increases than expected.

In Spain, where the first confinement was one of the strictest, GDP thus grew by nearly 20% compared to the second quarter of 2020. On the other hand, German growth, at 1.5%, was a little disappointing, particularly due to friction in industrial supply chains. With the lifting of restrictions in the spring, activity recovered in most sectors – and faster than expected. “The European economy is making a comeback, all the elements necessary for that are being put in place”, welcomed, on July 7, Valdis Dombrovskis, Vice-President of the European Commission.

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International trade has been maintained, households and businesses have adapted to the constraints linked to Covid-19. Available indicators show that private consumption has rebounded, and consumer confidence has been strong. But will it remain so in the coming months, as the spread of the Delta variant casts a shadow over the recovery? What to expect for the rest of the year? Since the outbreak of Covid-19 in our lives, it is more than eighteen months old, the forecasts are particularly delicate.

Two-speed recovery

The evolution of the activity will depend on that of the pandemic. “Due to the acceleration of vaccination, a new wave would necessarily be different from the previous ones, Angel Talavera, Oxford Economics, analyzes in a note on the subject. The risk of seeing hospitals overwhelmed is lower, limiting the likelihood of further national lockdowns. “ Rather reassuring. But he immediately qualifies: “The return of restrictions, even limited ones, would still have an impact on activity. “

“New restrictions on international travel could slow the recovery of tourism”, adds Jessica Hinds, at Capital Economics. This would penalize southern Europe in particular. According to its forecasts, spending by foreign tourists in Spain between June and August should hardly exceed 40% of the amounts reached for the same period in 2019. On July 2, faced with the resurgence of cases, Portugal was already forced to re-establish a curfew from 11 p.m. to 5 a.m.

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