According to Global Data, a leading data and analytics company, major European nations experienced a decline in real GDP in Q1 of 2021. The UK saw a figure of -6.1%, followed by Germany with – 3.1%, Italy with – 0.8%, and Spain with – 0.1%.
According to findings in the report, Q2 saw a massive improvement. The saving grace for Q2 was the vaccination drives and reopening initiatives in the wake of the Covid-19 crisis. These initiatives became the driving force behind the top ten European nations experiencing a GDP growth of approximately 4.5% in 2021.
As most European nations are preparing to open fully, this will reflect an expected steady economic recovery for H2 of 2021. However, the economy’s recovery for the EU will also come from respective countries allowing fully vaccinated tourists from other countries to enter.
How Easing Covid-19 Restrictions Will Bolster the Economy
Germany is slowly lifting restrictions for cafes and restaurants in addition to travel restrictions. France lifted curfews on June 20th, and it is no longer mandatory to wear masks in the country. Italy was also considering lifting curfews from low-risk areas.
While some countries reopened or eased restrictions, other countries like the United Kingdom have delayed opening up entirely due to the emergence of the Delta variant. With 48.9% of the United Kingdom’s population fully vaccinated, initiatives with reopenings and vaccination drives may aid a faster economic recovery.
Following in population vaccinations, Spain has successfully vaccinated 36.3% of its population. Switzerland, sitting at 34.1%, comes in third, with Belgium following closely at 33.9%. Along with substantial fiscal stimulus, consumers and businesses are experiencing a massive boost in confidence. Since June 2021, fiscal stimulus accounts for over 60% of Italy’s GDP, 37% of Germany’s GDP, the United Kingdom’s GDP at 29.8%, and over 26% for Spain.
On the Road to a Fast Recovery
In 2021, Global Data forecasts that the leader in economic recovery will be the United Kingdom, with an expected growth rate of over 6%. Coming in second will be France with more than 5.8%, Spain follows closely at 5.78%, and Italy at 4.6%.
Economists expect countries such as the Netherlands, Switzerland, and Belgium to see a rapid economic rebound in H2 of 2021, with an improving external business climate that focuses on the consumer’s demands.
The EU created the Next Generation EU program to bolster economic recovery across the continent. The initiative received the green light for spending several billion. With a figure worth roughly $915 billion, economists expect the economic and social recovery to be much faster during H2 of 2021.