Home ›› 31 Jul 2021 ›› World Biz

Euro zone rebounds strongly, inflation above ECB target

Reuters . Brussel
31 Jul 2021 00:00:00 | Update: 31 Jul 2021 05:10:52
Euro zone rebounds strongly, inflation above ECB target
People enjoy an evening drink at Place de la Contrescarpe in Paris as cafes, bars and restaurants reopen after closing down for months amid the coronavirus disease outbreak in France, May 19, 2021– Reuters Photo

The euro zone pulled more strongly than expected out the recession caused by the Covid-19 pandemic in the second quarter as coronavirus curbs eased, while inflation shoot past the European Central Bank's 2 per cent target.

The European Union's statistics office Eurostat said on Friday that its initial estimate of gross domestic product in the 19 countries was growth of 2.0 per cent quarter-on-quarter and 13.7 per cent year-on-year.

Economists polled by Reuters had expected a 1.5 per cent quarterly and a 13.2 per cent annual increase.Among the outperformers were the euro zone's third and fourth largest economies, Italy and Spain, with quarterly growth respectively of 2.7 per cent and 2.8 per cent. Portugal's tourism-heavy economy expanded by 4.9 per cent.

The euro zone has suffered two technical recessions - defined as two quarters of contraction - since the start of 2020, with coronavirus curbs hitting most recently in the period spanning the end of 2020 and the start of 2021.

The zone's GDP was largely dragged down in the first three months of this year by weakness in Germany where a lockdown from November had curbed private consumption.

Europe's largest economy returned to growth in the second quarter, but at 1.5 per cent quarter-on-quarter, it was less strong a rebound than

expectations.

×