The European Union’s economy expanded by 2% in the second quarter of this year, preliminary data from Eurostat has shown.
The 19-member euro zone’s economic growth in the second quarter follows a contraction of 0.3% in the first quarter and 0.6% in the final quarter of 2020 — two consecutive quarters of economic contraction define a recession.
Compared with the second quarter of 2020, Europe’s gross domestic product (GDP) increased 13.7%. Portugal, Austria and Latvia registered the highest quarterly growth rates within the euro zone.
However, the economic outlook across the European Union remains precarious. The highly transmissible COVID-19 Delta variant has led to a surge of infections in recent weeks for many European countries.
Meanwhile, in the U.S., the latest GDP numbers came in at an annualized 6.5% for the second quarter, below market expectations but slightly higher than the previous three-months.
The European Central Bank (ECB) expects GDP in the euro zone to reach 4.6% by the end of this year, followed by 4.7% growth next year.
In a separate data release, Eurostat said that annual inflation is projected to reach 2.2% in the euro zone in July. This would be up from 1.9% in June.
The ECB is trying to determine whether a recent surge in consumer prices is transitory. The ECB’s target is to support an inflation rate of 2%. The Frankfurt, Germany-based institution has said that inflation is expected to rise in the coming months, but that it will fall in 2022.
