Eurozone Economic Forecast

Eurozone Economic Outlook

September 28, 2021

The economy bounced back robustly in the second quarter, as the lifting of restrictions in the region amid expansionary fiscal and monetary policies bolstered household spending and investment activity. Available indicators suggest the recovery has carried over into the third quarter, albeit at a softer pace. A healthy rebound in industrial production in July, upbeat business sentiment in July-August and strong manufacturing PMI readings throughout the quarter hint at expanding private sector activity. Moreover, the services PMI has continued to signal strong expansions in the quarter, which, coupled with a further improvement in labor market conditions in July and stronger tourism activity, points to an ongoing recovery in the tertiary sector. However, weakening consumer confidence and mounting inflationary pressures in July-August could have weighed on household spending somewhat.

Eurozone Economic Growth

The economy should expand robustly this year and next, as accumulated savings, EU recovery funds and expansionary fiscal and monetary policies fuel domestic activity, while easing restrictions boost foreign demand. However, pandemic-related and political uncertainty, weaker fiscal metrics in the Mediterranean countries and banks’ troubled assets pose downside risks. The economy is seen expanding 4.8% in 2021. In 2022, GDP is seen increasing 4.4%, which is unchanged from last month’s forecast.

Eurozone Economy Data

2015 2016 2017 2018 2019
Population (million)334335336336337
GDP per capita (EUR)31,51032,29733,37634,39335,367
GDP (EUR bn)10,52410,81711,20111,56111,906
Economic Growth (GDP, annual variation in %)2.01.92.71.91.2
Domestic Demand (annual variation in %)2.32.42.31.61.9
Consumption (annual variation in %)1.81.91.91.41.3
Investment (annual variation in %)4.54.03.82.35.8
Exports (G&S, annual variation in %)6.42.95.83.52.5
Imports (G&S, annual variation in %)7.54.25.33.04.0
Industrial Production (annual variation in %)2.61.63.00.7-1.3
Retail Sales (annual variation in %)2.81.72.41.62.3
Unemployment Rate10.910.09.18.27.6
Fiscal Balance (% of GDP)-2.0-1.5-1.0-0.5-0.6
Public Debt (% of GDP)90.990.087.885.884.1
Money (annual variation in %)4.75.04.74.24.9
Inflation Rate (HICP, annual variation in %, eop)0.31.11.31.51.3
Inflation Rate (HICP, annual variation in %)0.20.21.51.81.2
Inflation (PPI, annual variation in %)-2.6-2.13.03.20.7
Policy Interest Rate (%)0.050.00.00.00.0
Stock Market (annual variation in %)5.51.68.8-14.522.1
Exchange Rate (vs EUR)1.091.051.201.141.12
Exchange Rate (vs EUR, aop)1.111.111.131.181.12
Current Account (% of GDP)2.83.33.13.12.7
Current Account Balance (EUR bn)291352348361320
Trade Balance (EUR billion)348362346300322

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Eurozone Facts

Value Change Date
Exchange Rate1.120.65 %Dec 31

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