Take THAT, Brussels! Eurozone in freefall as Brexit Britain storms ahead – new data
Greece should not have joined the Eurozone says Portillo
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Covid has also weighed on economic recovery with the Omicron variant and return of harsher restrictions in a number of countries damaging economic activity over winter. Growth across the Eurozone had grown by 2.3 percent in the third quarter but new statistics from Eurostat today showed growth slowed to 0.3 percent in the final months of 2021. Compared with the same quarter the previous year growth stood 4.6 percent higher. The results come shortly after similar data was revealed for the UK last week which showed growth expanding at the fastest rate since the end of the Second World War.
In comparison, the UK’s increase in growth for the final quarter of 2021 stood at one percent, over three times that of the Eurozone, with growth 6.5 percent higher compared to the same quarter the previous year.
Overall the UK recorded growth of 7.5 percent across 2021.
The Eurozone is bracing itself for further drags on growth in 2022 with mounting fears over energy prices due to the tense situation with Russia.
In a bulletin published today the European Central Bank (ECB) warned high energy prices would reduce Eurozone economic output by around 0.2 percent this year.
The EU also recently downgraded forecasts for GDP growth this year warning the Eurozone was entering 2022 “on a weaker note than previously projected.”
The bloc’s biggest economy, Germany, has suffered one of the biggest falls in growth with GDP shrinking -0.7 percent in quarter four.
As well as Covid, Germany has also been struggling to deal with supply chain issues causing problems for its large manufacturing sector with shortages of semiconductors being a particular issue for car production.
Austria also saw growth contract by -2.2 percent during the same period in which it introduced strict lockdown rules.
Spain meanwhile saw a two percent rise in GDP during this time reflecting a continued recovery of its key tourism sector and growing public investment.
Hungary also reported a rise of 2.1 percent with full year growth at 7.1 percent.
The country’s Finance Minister Mihály Varga described the performance as “outstanding” compared to other European Union members.
While GDP growth overall has struggled the EU has shown positive signs in employment data also released today.
Employment continued to grow for the third quarter in a row, rising by 0.5 percent in the final months of 2021.
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The data will be watched closely by the ECB as it considers the next direction of monetary policy in the eurozone.
Inflation is currently proving a major challenge to most of the Eurozone economies with soaring energy prices, in particular, hitting both businesses and consumers.
The ECB has so far held off raising interest rates amid fears of harming the bloc’s recovery and strength of the job market.
Speaking yesterday ECB President Christine Lagarde insisted the Bank would act “at the right time” but once again warned any change in policy would be gradual.
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