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News > European economy grows 2%, ending double-dip recession

European economy grows 2%, ending double-dip recession

Monday 02 August 2021

The second-quarter growth figure was stronger than the 1.5% foreseen by market analyst.

Europe emerged from a double-dip recession in the second quarter with stronger-than-expected growth of 2% over the quarter before, according to official figures, as pandemic restrictions eased, consumers started spending built-up savings and major companies showed stronger results.

But the economy in the 19 countries that use the shared euro currency still lagged behind pre-pandemic levels and trailed the faster recoveries in the U.S. and China.

The growth figure for the April-June quarter announced by the European Union’s statistics agency Eurostat compared to a drop of 0.3% in the first quarter of 2021, as eurozone nations endured a double-dip recession after a rebound in mid-2020. The second-quarter growth figure was stronger than the 1.5% foreseen by market analysts.

Much of the improvement came from southern European countries that had earlier been hit hard by large Covid-19 outbreaks and a loss of tourism revenue.

The European Central Bank is adding monetary support by keeping interest rate benchmarks at record lows and by purchasing 1.85 trillion euros in government and corporate bonds through at least March 2022. That step drives down longer-term borrowing rates and helps keep credit flowing to businesses and governments.