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Eurozone economy expands more than expected in Q2

By Michele Maatouk

Date: Friday 30 Jul 2021

Eurozone economy expands more than expected in Q2

(Sharecast News) - The eurozone economy grew more than expected in the second quarter as Covid restrictions were eased, according to preliminary data released on Friday by Eurostat.
The economy expanded by 2% on the quarter and by 13.7% on the year. Economists had been expecting 1.5% growth on the quarter and 13.2% on the year. In the first quarter, GDP shrank 0.3%.

The figures showed that most large economies beat expectations, with the exception of Germany. Italy and Spain recorded the largest growth, at 2.7% and 2.8%, respectively.

Bert Colijn, senior eurozone economist at ING, said: "A strong GDP figure confirms that the economic rebound is underway. It probably already started at some point in the first quarter as lockdowns have generally been eased since then, but the eurozone economy has experienced a bumpy ride.

"The Alpha variant which caused a tightening of restrictions, a weak start to the vaccination rollout and supply chain problems resulting in production hiccups all dampened the growth pace achieved in 2Q. That being said, it can be considered a strong start to the reopening and shows that demand has been very resilient."

Separate preliminary figures from Eurostat showed that inflation in the bloc rose to 2.2% in July from 1.9% in June, lifted by a rise in energy, food and services prices.

The eurozone unemployment rate, meanwhile, fell to 7.7% in June from 8% in May 2021 as the number of unemployed fell by 423,000 from 12.94m in May to 12.52m in June.

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