Eurozone pulled out of recession by Italy and Spain

Italy and Spain help eurozone out of recession

Business News

Italy and Spain are helping drive the eurozone out of recession following a stronger than expected expansion in the second quarter of 2021.

Conversely, the eurozone’s top two economies – Germany and France fell short of expectations.

The single currency area beat forecasts of a 1.5% increase in GDP thanks to the Italy’s and Spain’s results.

Second quarter growth

Figures from Eurostat show the eurozone grew at an annual rate of 13.7% in the April to June period. This is a stark improvement to last year’s covid-hit results.

The second quarter of 2021 growth followed declines of 0.6% in the final three months of 2020 and a further 0.3% drop in the first quarter of this year. Fresh covid waves across Europe and the world were the primary contributory factor.  

A computer chip shortage led to supply chain issues which in turn affected Germany’s manufacturing. Their expected growth of 2% in the second quarter was not matched with the actual result of 1.5%

Italy shows growth of 2.7%

However, the third and fourth largest eurozone economies – Italy and Spain – grew faster than expected.

Italy doubled the analysts’ expected results of 1.3% with a second-quarter growth of 2.7%. Spain pipped Italy with a 2.8% growth following a first quarter decline of 0.4%

France showed the weakest growth of the top four eurozone economies registering only 0.9%.

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