European economy: coming out of the shadows

Europe's economy has bounced back strongly with re-opening boosting output and consumption. Labour market conditions have improved markedly also.

The key takeaways from this Economic insights are:

  • Shadow unemployment has declined sharply across Europe, with the furlough rate falling to 5% of the labour force.
  • As the improving trend in the labour market continues, we expect output in the euro area to return to pre-crisis levels in the fourth quarter of this year.
  • We expect euro area real GDP growth to peak in the third quarter of 2021, and then moderate.
  • We forecast euro area growth of 4.9% this year and 4.3% in 2022.
  • However, with pandemic risks on the rise, the balance of risks is skewed to the downside and targeted business closures may increase again, slowing the recovery.

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Economic Insights European economy: coming out of the shadows

​Global growth peaks

See also former Economic Insights