The euro area economy showed the strongest recovery ever measured in the third quarter. Growth was close to 13% compared to the second quarter when the economy was still heavily affected by the first coronalockdown, according to the European statistical office Eurostat.
Moreover, the recovery was stronger than the average economists had anticipated. However, many connoisseurs remain pessimistic as new lockdownmeasures are now creating new economic problems. For example, ing experts speak of a ‘bittersweet result’ because of all the restrictions recently announced by governments. As a result, it has actually become inevitable that the economy will shrink sharply again in the fourth quarter.
Moreover, Eurostat does not yet have any specific figures for the Netherlands. However, it is already clear that the economic recovery was particularly strong in the southern countries and France. In Italy it was a plus of more than 16%, the Spanish economy grew almost 17% and the French economy grew more than 18%. Germany, the largest economy in Europe, also took off with a plus of over 8%.
Last quarter, the Eurozone economy was unable to rise above the level of a year earlier. The gross domestic product (GDP) of all Euro Area countries together was still more than 4% less than a year earlier. In some of the countries where data are already available, the backlog is greater. At the end of the third quarter, the Spanish economy still had almost 9% to make up for last year around that time.
Ing’s economists note that new inflation rates in the euro area also give cause for concern. Inflation rates in both september and October were below 0.3% on an annual basis, well below the level that the European Central Bank (ECB) prefers. It has also been known that unemployment in the euro area was 8.3% in September. That’s higher than the 8.2% that connoisseurs were counting on.
The ECB already issued a warning on Thursday about the economic recovery in the euro area. According to ECB president Christine Lagarde, the increasing incidence of infection and lock-down measures to contain the pandemic have led to a “marked deterioration” of the outlook, which necessitates intervention. In december, the central bank will almost certainly come up with additional support to boost the euro area.